$1,250,000,000
TERM LOAN AGREEMENT
Dated as of February 9, 1999
among
CENDANT CORPORATION,
as Borrower
THE LENDERS REFERRED TO HEREIN,
BANK OF AMERICA N.T. & S.A., as Syndication Agent
CREDIT LYONNAIS NEW YORK BRANCH
BANK OF NOVA SCOTIA
BARCLAYS BANK PLC,
as Co-Documentation Agents
FIRST UNION NATIONAL BANK
THE INDUSTRIAL BANK OF JAPAN, LIMITED, NEW YORK BRANCH,
as Managing Agents
PARIBAS
CREDIT SUISSE FIRST BOSTON
SUMITOMO BANK,
as Co-Agents
and
THE CHASE MANHATTAN BANK, as Administrative Agent
CHASE SECURITIES INC., as Lead Arranger and Book Manager
TABLE OF CONTENTS
Page
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1. DEFINITIONS...........................................................1
2. THE TERM LOANS.......................................................14
SECTION 2.1. Commitments.......................................14
SECTION 2.2. Term Loans........................................14
SECTION 2.3. Use of Proceeds...................................15
SECTION 2.4. Reserved..........................................15
SECTION 2.5. Borrowing Procedure...............................15
SECTION 2.6. Refinancings......................................16
SECTION 2.7. Fees..............................................16
SECTION 2.8. Repayment of Term Loans; Evidence of Debt.........17
SECTION 2.9. Interest on Term Loans............................18
SECTION 2.10. Interest on Overdue Amounts......................18
SECTION 2.11. Alternate Rate of Interest.......................18
SECTION 2.12. Reserved.........................................19
SECTION 2.13. Prepayment of Term Loans.........................19
SECTION 2.14. Eurodollar Reserve Costs.........................19
SECTION 2.15. Reserve Requirements;
Change in Circumstances.......................................20
SECTION 2.16. Change in Legality...............................22
SECTION 2.17. Reimbursement of Lenders.........................23
SECTION 2.18. Pro Rata Treatment...............................24
SECTION 2.19. Right of Setoff..................................24
SECTION 2.20. Manner of Payments...............................25
XXXXXXX 0.00. Xxxxxx Xxxxxx Withholding........................25
SECTION 2.22. Certain Pricing Adjustments......................27
3. REPRESENTATIONS AND WARRANTIES OF BORROWER...........................27
SECTION 3.1. Corporate Existence and Power.....................27
SECTION 3.2. Corporate Authority, No Violation and
Compliance with Law...........................................27
SECTION 3.3. Governmental and Other Approval
and Consents..................................................28
SECTION 3.4. Financial Statements of Borrower..................28
SECTION 3.5. No Material Adverse Change........................28
SECTION 3.6. INTENTIONALLY OMITTED.............................28
SECTION 3.7. Copyrights, Patents and Other Rights..............28
SECTION 3.8. Title to Properties...............................29
SECTION 3.9. Litigation........................................29
SECTION 3.10. Federal Reserve Regulations......................29
SECTION 3.11. Investment Company Act...........................29
SECTION 3.12. Enforceability...................................29
SECTION 3.13. Taxes............................................30
SECTION 3.14. Compliance with ERISA............................30
SECTION 3.15. Disclosure.......................................30
SECTION 3.16. Environmental Liabilities........................31
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Page
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4. CONDITIONS OF LENDING................................................31
SECTION 4.1. Conditions Precedent to Term Loans................31
(a) Loan Documents....................................31
(b) Corporate Documents for the Borrower..............31
(c) Financial Statements..............................32
(d) Opinions of Counsel...............................32
(e) No Material Adverse Change........................32
(f) Payment of Fees...................................32
(g) Litigation........................................32
(h) Officer's Certificate.............................32
(j) Other Documents...................................32
(k) Notice............................................32
(l) Representations and Warranties....................32
(m) No Event of Default...............................33
5. AFFIRMATIVE COVENANTS................................................33
SECTION 5.1. Financial Statements, Reports, etc................33
SECTION 5.2. Corporate Existence;
Compliance with Statutes......................................35
SECTION 5.3. Insurance.........................................35
SECTION 5.4. Taxes and Charges.................................35
SECTION 5.5. ERISA Compliance and Reports......................36
SECTION 5.6. Maintenance of and Access to Books and
Records; Examinations.........................................37
SECTION 5.7. Maintenance of Properties.........................37
SECTION 5.8. Changes in Character of Business..................37
6. NEGATIVE COVENANTS...................................................37
SECTION 6.1. Limitation on Indebtedness........................37
SECTION 6.2. INTENTIONALLY OMITTED.............................38
SECTION 6.3. Hotel Subsidiaries................................38
SECTION 6.4. Consolidation, Merger, Sale of Assets.............38
SECTION 6.5. Limitations on Liens..............................39
SECTION 6.6. Sale and Leaseback................................40
SECTION 6.7. Leverage..........................................40
SECTION 6.8. Interest Coverage Ratio...........................41
SECTION 6.9. Accounting Practices..............................41
7. EVENTS OF DEFAULT....................................................41
8. THE ADMINISTRATIVE AGENT.............................................44
SECTION 8.1. Administration by Administrative Agent............44
SECTION 8.2. Advances and Payments.............................44
SECTION 8.3. Sharing of Setoffs and Cash Collateral............45
SECTION 8.4. Notice to the Lenders.............................45
SECTION 8.5. Liability of Administrative Agent.................45
SECTION 8.6. Reimbursement and Indemnification.................46
SECTION 8.7. Rights of Administrative Agent....................47
SECTION 8.8. Independent Investigation by Lenders..............47
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Page
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SECTION 8.9. Notice of Transfer.................................47
SECTION 8.10. Successor Administrative Agent....................47
9. MISCELLANEOUS.........................................................48
SECTION 9.1. Notices............................................48
SECTION 9.2. Survival of Agreement, Representations
and Warranties, etc............................................49
SECTION 9.3. Successors and Assigns; Syndications;
Term Loan Sales; Participations................................49
SECTION 9.4. Expenses; Documentary Taxes........................53
SECTION 9.5. Indemnity..........................................54
SECTION 9.6. CHOICE OF LAW......................................54
SECTION 9.7. No Waiver..........................................55
SECTION 9.8. Extension of Maturity..............................55
SECTION 9.9. Amendments, etc....................................55
SECTION 9.10. Severability......................................55
SECTION 9.11. SERVICE OF PROCESS; WAIVER OF JURY TRIAL..........56
SECTION 9.12. Headings..........................................57
SECTION 9.13. Execution in Counterparts.........................57
SECTION 9.14. Entire Agreement..................................57
SECTION 9.15. Confidentiality...................................57
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SCHEDULES
2.1 Commitments
3.9 Litigation
6.1 Existing Indebtedness
6.5 Existing Liens
EXHIBITS
A Form of Term Note
B-1 Opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx
B-2 Opinion of Borrower Counsel
C Form of Assignment and Acceptance
D Form of Compliance Certificate
E Form of Borrowing Request
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TERM LOAN AGREEMENT (the "Agreement") dated as of February 9,
1999, among CENDANT CORPORATION, a Delaware corporation (the "Borrower"), the
Lenders referred to herein, the Syndication Agent, Co-Documentation Agents,
Managing Agents and Co-Agents identified on the signature pages hereto and THE
CHASE MANHATTAN BANK, a New York banking corporation, as administrative agent
(the "Administrative Agent") for the Lenders.
INTRODUCTORY STATEMENT
The Borrower has requested that the Lenders establish a
$1,250,000,000 committed term loan facility pursuant to which Term Loans may be
made to the Borrower.
Subject to the terms and conditions set forth herein, the
Administrative Agent is willing to act as administrative agent for the Lenders,
and each Lender is willing to make Term Loans to the Borrower.
Accordingly, the parties hereto hereby agree as follows:
1. DEFINITIONS
For the purposes hereof unless the context otherwise
requires, the following terms shall have the meanings indicated, all accounting
terms not otherwise defined herein shall have the respective meanings accorded
to them under GAAP and all terms defined in the New York Uniform Commercial
Code and not otherwise defined herein shall have the respective meanings
accorded to them therein:
"ABR Borrowing" shall mean a Borrowing comprised of ABR
Loans.
"ABR Loan" shall mean any Term Loan bearing interest at a
rate determined by reference to the Alternate Base Rate in accordance
with the provisions of Article 2.
"ABR Spread" means 0%.
"Affiliate" shall mean any Person which, directly or
indirectly, is in control of, is controlled by, or is under common
control with, the Borrower. For purposes of this definition, a Person
shall be deemed to be "controlled by" another if such latter Person
possesses, directly or indirectly, power either to (i) vote 10% or
more of the securities having ordinary voting power for the election
of directors of such controlled Person or (ii) direct or cause the
direction of the management and policies of such controlled Person
whether by contract or otherwise.
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"Alternate Base Rate" shall mean for any day, a rate per
annum (rounded upwards to the nearest 1/16 of 1% if not already an
integral multiple of 1/16 of 1%) equal to the greatest of (a) the
Prime Rate in effect for such day, (b) the Federal Funds Effective
Rate in effect for such day plus 1/2 of 1% or (c) the Base CD Rate in
effect for such day plus 1%. For purposes hereof, "Prime Rate" shall
mean the rate per annum publicly announced by the Administrative Agent
from time to time as its prime rate in effect at its principal office
in New York City. For purposes of this Agreement, any change in the
Alternate Base Rate due to a change in the Prime Rate shall be
effective on the date such change in the Prime Rate is announced as
effective. "Federal Funds Effective Rate" shall mean, for any period,
a fluctuating interest rate per annum equal for each day during such
period to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by
Federal funds brokers, as published on the succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average of the
quotations for the day of such transactions received by the
Administrative Agent from three Federal funds brokers of recognized
standing selected by it. "Base CD Rate" shall mean the sum of (a) the
product of (i) the Average Weekly Three-Month Secondary CD Rate times
(ii) a fraction of which the numerator is 100% and the denominator is
100% minus the aggregate rates of (A) basic and supplemental reserve
requirements in effect on the date of effectiveness of such Average
Weekly Three-Month Secondary CD Rate, as set forth below, under
Regulation D of the Board applicable to certificates of deposit in
units of $100,000 or more issued by a "member bank" located in a
"reserve city" (as such terms are used in Regulation D) and (B)
marginal reserve requirements in effect on such date of effectiveness
under Regulation D applicable to time deposits of a "member bank" and
(b) the Assessment Rate. "Average Weekly Three-Month Secondary CD
Rate" shall mean the three-month secondary certificate of deposit
("CD") rate for the most recent weekly period covered therein in the
Federal Reserve Statistical release entitled "Weekly Summary of
Lending and Credit Measures (Averages of daily figures)" released in
the week during which occurs the day for which the CD rate is being
determined. The CD rate so reported shall be in effect, for the
purposes of this definition, for each day of the week in which the
release date of such publication occurs. If such publication or a
substitute containing the foregoing rate information is not published
by the Federal Reserve for any week, such average rate shall be
determined by the Administrative Agent on the basis of quotations
received by it from three New York City negotiable certificate of
deposit dealers of recognized standing on the first Business Day of
the week succeeding such week for which such rate information is not
published. If for any
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reason the Administrative Agent shall have determined (which
determination shall be conclusive absent manifest error) that it is
unable to ascertain the Base CD Rate or Federal Funds Effective Rate,
or both, for any reason, including, without limitation, the inability
or failure of the Administrative Agent to obtain sufficient bids or
publications in accordance with the terms hereof, the Alternate Base
Rate shall be determined without regard to clause (b) or (c), or
both, until the circumstances giving rise to such inability no longer
exist. Any change in the Alternate Base Rate due to a change in the
Average Weekly Three-Month Secondary CD Rate shall be effective on
the effective date of such change in the CD Rate. Any change in the
Alternate Base Rate due to a change in the Federal Funds Effective
Rate shall be effective on the effective date of such change in the
Federal Funds Effective Rate.
"Applicable Law" shall mean all provisions of statutes,
rules, regulations and orders of governmental bodies or regulatory
agencies applicable to a Person, and all orders and decrees of all
courts and arbitrators in proceedings or actions in which the Person
in question is a party.
"Applicable Margin" shall mean (i) for ABR Loans, the ABR
Spread and (ii) for LIBOR Loans, the LIBOR Spread. Each Applicable
Margin shall be subject to increase as provided in Section 2.22.
"Assessment Rate" shall mean, for any day, the net annual
assessment rate (rounded upwards, if necessary, to the next higher
Basis Point) as most recently estimated by the Administrative Agent
for determining the then current annual assessment payable by the
Administrative Agent to the Federal Deposit Insurance Corporation (or
any successor) for insurance by such Corporation (or such successor)
of time deposits made in dollars at the Administrative Agent's
domestic offices.
"Assignment and Acceptance" shall mean an agreement in the
form of Exhibit C hereto, executed by the assignor, assignee and the
other parties as contemplated thereby.
"Basis Point" shall mean 1/100th of 1%.
"Board" shall mean the Board of Governors of the
Federal Reserve System.
"Borrowing" shall mean a group of Term Loans of a single
Interest Rate Type made by the Lenders on a single date and as to
which a single Interest Period is in effect.
"Borrowing Request" shall mean a request made pursuant to
Section 2.5 in the form of Exhibit E.
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"Business Day" shall mean any day other than a Saturday,
Sunday or other day on which banks in the State of New York are
permitted to close; provided, however, that when used in connection
with a LIBOR Loan, the term "Business Day" shall also exclude any day
on which banks are not open for dealings in Dollar deposits on the
London Interbank Market.
"Capital Lease" shall mean as applied to any Person, any
lease of any property (whether real, personal or mixed) by that Person
as lessee which, in accordance with GAAP, is or should be accounted
for as a capital lease on the balance sheet of that Person.
"Capital Stock" means any and all shares, interests,
participations or other equivalents (however designated) of capital
stock of a corporation, any and all equivalent ownership interests in
a Person (other than a corporation) and any and all warrants, rights
or options to purchase any of the foregoing.
"Change in Control" shall mean (i) the acquisition by any
Person or group (within the meaning of the Securities Exchange Act of
1934 and the rules of the Securities and Exchange Commission
thereunder as in effect on the Closing Date), directly or indirectly,
beneficially or of record, of ownership or control of in excess of 30%
of the voting common stock of the Borrower on a fully diluted basis at
any time or (ii) if at any time, individuals who at the Closing Date
constituted the Board of Directors of the Borrower (together with any
new directors whose election by such Board of Directors or whose
nomination for election by the shareholders of the Borrower, as the
case may be, was approved by a vote of the majority of the directors
then still in office who were either directors at the Closing Date or
whose election or a nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board
of Directors of the Borrower then in office.
"Chase" shall mean The Chase Manhattan Bank, a New York
banking corporation.
"Closing Date" shall mean the date on which the conditions
precedent to the making of the Term Loans as set forth in Section 4.1
have been satisfied or waived, which shall in no event be later than
March 31, 1999.
"Code" shall mean the Internal Revenue Code of 1986 and the
rules and regulations issued thereunder, as now and hereafter in
effect, or any successor provision thereto.
"Consolidated Assets" shall mean, at any date of
determination, the total assets of the Borrower and its
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Consolidated Subsidiaries determined in accordance with GAAP.
"Consolidated EBITDA" shall mean, without duplication, for
any period for which such amount is being determined, the sum of the
amounts for such period of (i) Consolidated Net Income, (ii) provision
for taxes based on income, (iii) depreciation expense, (iv)
Consolidated Interest Expense, (v) amortization expense, (vi)
non-recurring cash charges or expenses in fiscal year 1998 not to
exceed $363,600,000 to the extent incurred or paid in such period,
(vii) non-recurring cash charges or expenses in fiscal year 1998 to
the extent incurred or paid in such period in connection with the
termination of the American Bankers Insurance Group, Inc. transaction
(in addition to the amounts referred to in the preceding clause (vi)),
plus (viii) other non-cash items reducing Consolidated Net Income
minus (ix) any cash expenditures during such period to the extent such
cash expenditures (x) did not reduce Consolidated Net Income for such
period and (y) were applied against reserves that constituted non-cash
items which reduced Consolidated Net Income during prior periods, all
as determined on a consolidated basis for the Borrower and its
Consolidated Subsidiaries in accordance with GAAP. Notwithstanding the
foregoing, in calculating Consolidated EBITDA pro forma effect shall
be given to each acquisition of a Subsidiary or any entity acquired in
a merger in any relevant period for which the covenants set forth in
Sections 6.7 and 6.8 are being calculated as if such acquisition had
been made on the first day of such period.
"Consolidated Interest Expense" shall mean for any period for
which such amount is being determined, total interest expense paid or
payable in cash (including that properly attributable to Capital
Leases in accordance with GAAP but excluding in any event all
capitalized interest and amortization of debt discount and debt
issuance costs) of the Borrower and its Consolidated Subsidiaries on a
consolidated basis including, without limitation, all commissions,
discounts and other fees and charges owed with respect to letters of
credit and bankers' acceptance financing and net cash costs (or minus
net profits) under Interest Rate Protection Agreements minus, without
duplication, any interest income of the Borrower and its Consolidated
Subsidiaries on a consolidated basis during such period.
Notwithstanding the foregoing, interest expense on any Indebtedness of
the Borrower or any of its Subsidiaries which (or the proceeds of
which) directly or indirectly provides credit support for the RAC Loan
Notes shall be deemed not to be included in Consolidated Interest
Expense.
"Consolidated Net Income" shall mean, for any period for
which such amount is being determined, the net income
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(loss) of the Borrower and its Consolidated Subsidiaries during such
period determined on a consolidated basis for such period taken as a
single accounting period in accordance with GAAP, provided that there
shall be excluded (i) income (or loss) of any Person (other than a
Consolidated Subsidiary of the Borrower) in which the Borrower or any
of its Consolidated Subsidiaries has an equity investment or
comparable interest, except to the extent of the amount of dividends
or other distributions actually paid to the Borrower or of its
Consolidated Subsidiaries by such Person during such period, (ii) the
income of any Consolidated Subsidiary of the Borrower to the extent
that the declaration or payment of dividends or similar distributions
by that Consolidated Subsidiary of the income is not at the time
permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Consolidated Subsidiary, (iii) any
extraordinary after-tax gains and (iv) any extraordinary or unusual
pretax losses.
"Consolidated Net Worth" shall mean, as of any date of
determination, all items which in conformity with GAAP would be
included under shareholders' equity on a consolidated balance sheet of
the Borrower and its Subsidiaries at such date plus amounts
representing mandatorily redeemable preferred securities issued by
Subsidiaries of the Borrower (other than PHH and its Subsidiaries).
Consolidated Net Worth shall include the Borrower's equity interest in
PHH.
"Consolidated Subsidiaries" shall mean all Subsidiaries of
the Borrower that are required to be consolidated with the Borrower
for financial reporting purposes in accordance with GAAP.
"Consolidated Total Indebtedness" shall mean (i) the total
amount of Indebtedness of the Borrower and its Consolidated
Subsidiaries determined on a consolidated basis using GAAP principles
of consolidation which are, at the date as of which Consolidated Total
Indebtedness is to be determined, includable as liabilities on a
consolidated balance sheet of the Borrower and its Subsidiaries, plus
(ii) without duplication of any items included in Indebtedness
pursuant to the foregoing clause (i), indebtedness of others which the
Borrower or any of its Consolidated Subsidiaries has directly or
indirectly assumed or guaranteed (but only to the extent so assumed or
guaranteed) or otherwise provided credit support therefor, including
without limitation, Guaranties. For purposes of this definition, the
amount of Indebtedness at any time shall be reduced (but not to less
than zero) by the amount of Excess Cash.
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"Debt to Capitalization Ratio" shall mean at any time the
ratio of (x) Consolidated Total Indebtedness to (y) the sum of (i)
Consolidated Total Indebtedness plus (ii) Consolidated Net Worth.
"Default" shall mean any event, act or condition which with
notice or lapse of time, or both, would constitute an Event of
Default.
"Disclosed Class Actions" shall mean the class action
lawsuits described in the 1998 8-K and other class action lawsuits
arising as a result of the accounting irregularities and errors
disclosed in the 1998 8-K.
"Dollars" and "$" shall mean lawful money of the United
States of America.
"Environmental Laws" shall mean any and all federal, state,
local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees or requirements of any Governmental
Authority regulating, relating to or imposing liability or standards
of conduct concerning, any Hazardous Material or environmental
protection or health and safety, as now or may at any time hereafter
be in effect, including without limitation, the Clean Water Act also
known as the Federal Water Pollution Control Act ("FWPCA"), 33 U.S.C.
ss. 1251 et seq., the Clean Air Act ("CAA"), 42 U.S.C. xx.xx. 7401 et
seq., the Federal Insecticide, Fungicide and Rodenticide Act
("FIFRA"), 7 U.S.C. xx.xx. 136 et seq., the Surface Mining Control and
Reclamation Act ("SMCRA"), 30 U.S.C. xx.xx. 1201 et seq., the
Comprehensive Environmental Response, Compensation and Liability Act
("CERCLA"), 42 U.S.C. ss. 9601 et seq., the Superfund Amendment and
Reauthorization Act of 1986 ("XXXX"), Public Law 99-499, 100 Stat.
1613, the Emergency Planning and Community Right to Know Act
("ECPCRKA"), 42 U.S.C. ss. 11001 et seq., the Resource Conservation
and Recovery Act ("RCRA"), 42 U.S.C. ss. 6901 et seq., the
Occupational Safety and Health Act as amended ("OSHA"), 29 U.S.C. ss.
655 and ss. 657, together, in each case, with any amendment thereto,
and the regulations adopted and publications promulgated thereunder
and all substitutions thereof.
"Environmental Liabilities" shall mean any liability,
contingent or otherwise (including any liability for damages, costs of
environmental remediation, fines, penalties or indemnities), of the
Borrower or any Subsidiary directly or indirectly resulting from or
based upon (a) violation of any Environmental Law, (b) the generation,
use, handling, transportation, storage, treatment or disposal of any
Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the
release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual
arrangement pursuant
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to which liability is assumed or imposed with respect to any of the
foregoing.
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as such Act may be amended, and the regulations
promulgated thereunder.
"Event of Default" shall have the meaning given such term in
Article 7 hereof.
"Excess Cash" shall mean all cash and cash equivalents of the
Borrower and its Consolidated Subsidiaries at such time determined on
a consolidated basis in accordance with GAAP in excess of $25,000,000.
"Existing Term Loan Agreement" shall mean the Term Loan
Agreement, dated as of May 29, 1998, as amended, among the Borrower,
the lenders and agents referred to therein and Chase, as
administrative agent.
"Fundamental Documents" shall mean this Agreement, any Term
Notes and any other ancillary documentation which is required to be,
or is otherwise, executed by the Borrower and delivered to the
Administrative Agent in connection with this Agreement.
"GAAP" shall mean generally accepted accounting principles
consistently applied (except for accounting changes in response to
FASB releases or other authoritative pronouncements) provided,
however, that all calculations made pursuant to Sections 6.7 and 6.8
and the related definitions shall have been computed based on such
generally accepted accounting principles as are in effect on the
Closing Date.
"Governmental Authority" shall mean any federal, state,
municipal or other governmental department, commission, board, bureau,
agency or instrumentality, or any court, in each case whether of the
United States or foreign.
"Guaranty" shall mean, as to any Person, any direct or
indirect obligation of such Person guaranteeing or intended to
guarantee any Indebtedness, Capital Lease, dividend or other monetary
obligation ("primary obligation") of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not
contingent, (a) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (b) to
advance or supply funds (i) for the purchase or payment of any such
primary obligation or (ii) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth
or solvency of the primary obligor, (c) to purchase property,
securities or
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services, in each case, primarily for the purpose of assuring the
owner of any such primary obligation of the repayment of such primary
obligation or (d) as a general partner of a partnership or a joint
venturer of a joint venture in respect of indebtedness of such
partnership or such joint venture which is treated as a general
partnership for purposes of Applicable Law. The amount of any
Guaranty shall be deemed to be an amount equal to the stated or
determinable amount (or portion thereof) of the primary obligation in
respect of which such Guaranty is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect
thereof (assuming such Person is required to perform thereunder);
provided, however, that the amount of any Guaranty shall be limited
to the extent necessary so that such amount does not exceed the value
of the assets of such Person (as reflected on a consolidated balance
sheet of such Person prepared in accordance with GAAP) to which any
creditor or beneficiary of such Guaranty would have recourse.
Notwithstanding the foregoing definition, the term "Guaranty" shall
not include any direct or indirect obligation of a Person as a
general partner of a general partnership or a joint venturer of a
joint venture in respect of Indebtedness of such general partnership
or joint venture, to the extent such Indebtedness is contractually
non-recourse to the assets of such Person as a general partner or
joint venturer (other than assets comprising the capital of such
general partnership or joint venture).
"Hazardous Materials" shall mean any flammable materials,
explosives, radioactive materials, hazardous materials, hazardous
wastes, hazardous or toxic substances, or similar materials defined as
such in any Environmental Law.
"Hotel Subsidiary" shall mean any Subsidiary of the Borrower
which (a) is engaged as its principal activity in the hotel
franchising business or related activities or (b) owns or licenses
from a Person other than the Borrower or another Subsidiary, any
proprietary right related to the hotel franchising business.
"Indebtedness" shall mean (without double counting), at any
time and with respect to any Person, (i) indebtedness of such Person
for borrowed money (whether by loan or the issuance and sale of debt
securities) or for the deferred purchase price of property or services
purchased (other than amounts constituting trade payables arising in
the ordinary course and payable within 180 days); (ii) indebtedness of
others which such Person has directly or indirectly assumed or
guaranteed (but only to the extent so assumed or guaranteed) or
otherwise provided credit support therefor, including without
limitation, Guaranties; (iii) indebtedness of others secured by a Lien
on assets of such Person,
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whether or not such Person shall have assumed such indebtedness (but
only to the extent of the fair market value of such assets); (iv)
obligations of such Person in respect of letters of credit,
acceptance facilities, or drafts or similar instruments issued or
accepted by banks and other financial institutions for the account of
such Person (other than trade payables arising in the ordinary course
and payable within 180 days); or (v) obligations of such Person under
Capital Leases. In order to avoid doubt with respect to double
counting, any Indebtedness of the Borrower or any of its
Subsidiaries, in an amount not to exceed the principal of the RAC
Loan Notes, which (or the proceeds of which) directly or indirectly
provides credit support for the RAC Loan Notes shall be deemed not to
be Indebtedness for purposes of this Agreement.
"Interest Coverage Ratio" shall mean, for each period for
which it is to be determined, the ratio of (i) Consolidated EBITDA to
(ii) Consolidated Interest Expense.
"Interest Payment Date" shall mean, with respect to any
Borrowing, the last day of the Interest Period applicable thereto and,
in the case of a LIBOR Borrowing with an Interest Period of more than
three months' duration, each day that would have been an Interest
Payment Date had successive Interest Periods of three months' duration
been applicable to such Borrowing, and, in addition, the date of any
refinancing or conversion of a Borrowing with, or to, a Borrowing of a
different Interest Rate Type.
"Interest Period" shall mean (a) as to any LIBOR Borrowing,
the period commencing on the date of such Borrowing, and ending (i)
one week after the date of such Borrowing or (ii) on the numerically
corresponding day (or, if there is no numerically corresponding day,
on the last day) in the calendar month that is 1, 2, 3, 6 or, subject
to each Lender's approval, 12 months thereafter, as the Borrower may
elect, and (b) as to any ABR Borrowing, the period commencing on the
date of such Borrowing and ending on the earliest of (i) the next
succeeding March 31, June 30, September 30 or December 31, commencing
Xxxxx 00, 0000, (xx) the Maturity Date and (iii) the date such
Borrowing is refinanced with a Borrowing of a different Interest Rate
Type in accordance with Section 2.6 or is prepaid in accordance with
Section 2.13; provided, however, that (i) if any Interest Period would
end on a day other than a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless, in the case of
LIBOR Loans only, such next succeeding Business Day would fall in the
next calendar month, in which case such Interest Period shall end on
the next preceding Business Day, and (ii) no Interest Period with
respect to any LIBOR Borrowing may be selected which would result in
any LIBOR Loans having Interest Periods ending after the Maturity
Date. Interest
- 10 -
shall accrue from, and including, the first day of an Interest Period
to, but excluding, the last day of such Interest Period.
"Interest Rate Protection Agreement" shall mean any interest
rate swap agreement, interest rate cap agreement or other similar
financial agreement or arrangement.
"Interest Rate Type" when used in respect of any Term Loan or
Borrowing, shall refer to the Rate by reference to which interest on
such Term Loan or on the Term Loans comprising such Borrowing is
determined. For purposes hereof, "Rate" shall include LIBOR and the
Alternate Base Rate.
"Lender and "Lenders" shall mean the financial institutions
whose names appear on the signature pages hereof and any assignee of a
Lender pursuant to Section 9.3(b).
"Lending Office" shall mean, with respect to any of the
Lenders, the branch or branches (or affiliate or affiliates) from
which any such Lender's LIBOR Loans or ABR Loans, as the case may be,
are made or maintained and for the account of which all payments of
principal of, and interest on, such Lender's LIBOR Loans or ABR Loans
are made, as notified to the Administrative Agent from time to time.
"LIBOR" shall mean, with respect to any LIBOR Borrowing for
any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next Basis Point) equal to the rate at which Dollar
deposits approximately equal in principal amount to the portion of
such LIBOR Borrowing made by the financial institution acting as
Administrative Agent, and for a maturity comparable to such Interest
Period, are offered to the principal London office of the institution
then acting as Administrative Agent in immediately available funds in
the London Interbank Market at approximately 11:00 a.m., London time,
two Business Days prior to the commencement of such Interest Period,
provided that for purposes of calculating LIBOR for any LIBOR
Borrowing having an Interest Period of one week, LIBOR shall mean an
interest rate per annum (rounded upwards, if necessary, to the next
Basis Point) equal to the rate at which Dollar deposits approximately
equal in principal amount to the portion of such LIBOR Borrowing made
by the financial institution acting as Administrative Agent, and for a
maturity comparable to such Interest Period, are offered by the
principal New York office of the institution then acting as
Administrative Agent in immediately available funds at approximately
10:00 a.m., New York time, two Business Days prior to the commencement
of such Interest Period.
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"LIBOR Borrowing" shall mean a Borrowing comprised of
LIBOR Loans.
"LIBOR Loan" shall mean any Term Loan bearing interest at a
rate determined by reference to LIBOR in accordance with the
provisions of Article 2.
"LIBOR Spread" shall mean 1%.
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind whatsoever (including any
conditional sale or other title retention agreement, any lease in the
nature thereof or agreement to give any financing statement under the
Uniform Commercial Code of any jurisdiction).
"Margin Stock" shall be as defined in Regulation U of
the Board.
"Material Adverse Effect" shall mean a material adverse
effect on the business, assets, operations or condition, financial or
otherwise, of the Borrower and its Subsidiaries taken as a whole (it
is understood that, for purposes of this definition, the accounting
irregularities and errors disclosed in the 1998 8-K and the Disclosed
Class Actions do not constitute a Material Adverse Effect).
"Material Subsidiary" shall mean (i) any Subsidiary of the
Borrower which, together with its Subsidiaries at the time of
determination, holds, or, solely with respect to Sections 7(f) and
7(g), any group of Subsidiaries which, if merged into each other at
the time of determination would hold, assets constituting 10% or more
of Consolidated Assets or accounts for 10% or more of Consolidated
EBITDA for the Rolling Period immediately preceding the date of
determination or (ii) any Subsidiary of the Borrower which holds
material trademarks, tradenames or other intellectual property rights.
"Maturity Date" shall mean February 9, 2001.
"Moody's" shall mean Xxxxx'x Investors Service Inc.
"Multiemployer Plan" shall mean a plan described in
Section 3(37) of ERISA.
"1998 8-K" shall mean the Borrower's report on Form 8-K dated
August 28, 1998 filed with the Securities and Exchange Commission.
"Obligations" shall mean the obligation of the Borrower to
make due and punctual payment of principal of, and interest on, the
Term Loans and all other monetary obligations of the Borrower to the
Administrative Agent or
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any Lender under this Agreement, the Term Notes or the Fundamental
Documents or with respect to any Interest Rate Protection Agreements
entered into between the Borrower and any Lender.
"PBGC" shall mean the Pension Benefit Guaranty
Corporation or any successor thereto.
"Permitted Encumbrances" shall mean Liens permitted
under Section 6.5 hereof.
"Person" shall mean any natural person, corporation, division
of a corporation, partnership, trust, joint venture, association,
company, estate, unincorporated organization or government or any
agency or political subdivision thereof.
"PHH" shall mean PHH Corporation, a Maryland
corporation.
"Plan" shall mean an employee pension benefit plan described
in Section 3(2) of ERISA, other than a Multiemployer Plan.
"Pro Forma Basis" shall mean in connection with any
transaction for which a determination on a Pro Forma Basis is required
to be made hereunder, that such determination shall be made (i) after
giving effect to any issuance of Indebtedness, any acquisition, any
disposition or any other transaction (as applicable) and (ii) assuming
that the issuance of Indebtedness, acquisition, disposition or other
transaction and, if applicable, the application of any proceeds
therefrom, occurred at the beginning of the most recent Rolling Period
ending at least thirty (30) days prior to the date on which such
issuance of Indebtedness, acquisition, disposition or other
transaction occurred.
"RAC Loan Notes" shall mean the loan notes to be issued by
the Borrower to the sellers of the RAC Motoring Service Limited
business in connection with the Borrower's acquisition of such
business.
"Reportable Event" shall mean any reportable event as defined
in Section 4043(b) of ERISA, other than a reportable event as to which
provision for 30-day notice to the PBGC would be waived under
applicable regulations had the regulations in effect on the Closing
Date been in effect on the date of occurrence of such reportable
event.
"Required Lenders" shall mean at any time Lenders holding 51%
of the aggregate principal amount of the Term Loans at the time
outstanding.
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"Rolling Period" shall mean with respect to any fiscal
quarter, such fiscal quarter and the three immediately preceding
fiscal quarters considered as a single accounting period.
"S&P" shall mean Standard & Poor's Ratings Services.
"Statutory Reserves" shall mean a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator
of which is the number one minus the aggregate of the maximum reserve
percentages (including any marginal, special, emergency or
supplemental reserves) expressed as a decimal established by the Board
and any other banking authority to which the Administrative Agent or
any Lender is subject, for Eurocurrency Liabilities (as defined in
Regulation D). Such reserve percentages shall include those imposed
under Regulation D. LIBOR Loans shall be deemed to constitute
Eurocurrency Liabilities and as such shall be deemed to be subject to
such reserve requirements without benefit of or credit for proration,
exceptions or offsets which may be available from time to time to any
Lender under Regulation D. Statutory Reserves shall be adjusted
automatically on and as of the effective date of any change in any
reserve percentage.
"Subsidiary" shall mean with respect to any Person, any
corporation, association, joint venture, partnership or other business
entity (whether now existing or hereafter organized) of which at least
a majority of the voting stock or other ownership interests having
ordinary voting power for the election of directors (or the
equivalent) is, at the time as of which any determination is being
made, owned or controlled by such Person or one or more Subsidiaries
of such Person or by such Person and one or more Subsidiaries of such
Person; provided that for purposes of Sections 6.1, 6.5, 6.6, 6.7 and
6.8 hereof, PHH and its Subsidiaries shall be deemed not to be
Subsidiaries of the Borrower except that (a) Consolidated Net Worth
shall be calculated in accordance with the definition thereof and (b)
in calculating Consolidated EBITDA for any fiscal quarter the amount
of any cash dividends or any other cash distributions actually paid by
PHH or any Subsidiary of PHH to the Borrower and its Subsidiaries
(excluding the Subsidiaries of PHH) (i) during such period and (ii) up
to the time of the delivery of the certificate pursuant to Section
5.1(c) hereof related to such period shall be included in such
calculation. Any such cash dividends and distributions received from
PHH and its Subsidiaries in one period and included in calculating
Consolidated EBITDA for any prior period shall not be included in
calculating Consolidated EBITDA for any fiscal quarter ending on or
after the first anniversary of the date such dividends and
distributions are received.
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"Term Loans" shall mean the Term Loans made by the Lenders to
the Borrower pursuant to a notice given by the Borrower under Section
2.5. Each Term Loan shall be a LIBOR Loan or an ABR Loan.
"Term Note" shall have the meaning assigned to such term in
Section 2.8.
2. THE TERM LOANS
SECTION 2.1. Commitments.
Subject to the terms and conditions hereof and relying upon
the representations and warranties herein set forth, each Lender agrees,
severally and not jointly, to make Term Loans to the Borrower, on a single
borrowing date at any time on and after the Closing Date and prior to March 31,
1999 in an aggregate principal amount at any time outstanding not to exceed the
amount set forth opposite such Lender's name on Schedule 2.1.
SECTION 2.2. Term Loans.
(a) Term Loans shall be made as part of a Borrowing
consisting of Term Loans made by the Lenders ratably in accordance with the
amounts set forth in Schedule 2.1; provided, however, that the failure of any
Lender to make any Term Loan shall not in itself relieve any other Lender of
its obligation to lend hereunder (it being understood, however, that no Lender
shall be responsible for the failure of any other Lender to make any Term Loan
required to be made by such other Lender). The Term Loans comprising any
Borrowing shall be (i) in the case of LIBOR Loans, in an aggregate principal
amount that is an integral multiple of $5,000,000 and not less than $10,000,000
and (ii) in the case of ABR Loans, in an aggregate principal amount that is an
integral multiple of $500,000 and not less than $5,000,000.
(b) Each Borrowing shall be comprised entirely of LIBOR Loans
or ABR Loans, as the Borrower may request pursuant to Section 2.4 or 2.5, as
applicable. Each Lender may at its option make any LIBOR Loan by causing any
domestic or foreign branch or Affiliate of such Lender to make such Term Loan,
provided that any exercise of such option shall not affect the obligation of
the Borrower to repay such Term Loan in accordance with the terms of this
Agreement and the applicable Term Note. Borrowings of more than one Interest
Rate Type may be outstanding at the same time; provided, however, that the
Borrower shall not be entitled to request any Borrowing that, if made, would
result in an aggregate of more than 9 separate Borrowings being outstanding
hereunder at any one time. For purposes of the calculation required by the
immediately preceding sentence, LIBOR Loans having different Interest Periods,
regardless of whether they commence on the same date, shall be considered
separate Borrowing, and all Borrowings of a single Interest Rate Type made
- 15 -
on a single date shall be considered a single Borrowing if such Borrowings have
a common Interest Period.
(c) Subject to Section 2.6, each Lender shall make the Term
Loan to be made by it hereunder on the proposed date thereof by making funds
available at the offices of the Administrative Agent's Agent Bank Services
Department, 1 Chase Xxxxxxxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxxxxx Xxxx, for credit to Cendant Corporation Clearing Account,
Account No. 144812905 (Reference: Cendant Corporation Term Loan Agreement dated
as of February 9, 1999) no later than 1:00 P.M. New York City time in Federal
or other immediately available funds. Upon receipt of the funds to be made
available by the Lenders to fund any Borrowing hereunder, the Administrative
Agent shall disburse such funds by depositing them into an account of the
Borrower maintained with the Administrative Agent. Term Loans shall be made by
all the Lenders pro rata in accordance with Section 2.1 and this Section 2.2.
(d) Notwithstanding any other provision of this Agreement,
the Borrower shall not be entitled to request any Borrowing if the Interest
Period requested with respect thereto would end after the Maturity Date.
SECTION 2.3. Use of Proceeds.
The proceeds of the Term Loans shall be used by the
Borrower to refinance amounts owed under the Existing Term Loan Agreement.
SECTION 2.4. Reserved.
SECTION 2.5. Borrowing Procedure.
In order to effect a Borrowing, the Borrower shall hand
deliver or telecopy to the Administrative Agent a Borrowing Request in the form
of Exhibit E (a) in the case of a LIBOR Borrowing, not later than 12:00 (noon),
New York City time, three Business Days before a proposed Borrowing, and (b) in
the case of an ABR Borrowing, not later than 12:00 (noon), New York City time,
on the day of a proposed Borrowing. Such Borrowing Request shall be irrevocable
and shall in each case specify (a) whether the Borrowing then being requested
is to be a LIBOR Borrowing or an ABR Borrowing, (b) the date of such Borrowing
(which shall be a Business Day) and the amount thereof and (c) if such
Borrowing is to be a LIBOR Borrowing, the Interest Period with respect thereto.
If no election as to the Interest Rate Type of a Borrowing is specified in any
such Borrowing Request, then the requested Borrowing shall be an ABR Borrowing.
If no Interest Period with respect to any LIBOR Borrowing is specified in any
such Borrowing Request, then the Borrower shall be deemed to have selected an
Interest Period of one month's duration. If the Borrower shall not have given a
Borrowing Request in accordance
- 16 -
with this Section 2.5 of its election to refinance a Borrowing prior to the end
of the Interest Period in effect for such Borrowing, then the Borrower shall
(unless such Borrowing is repaid at the end of such Interest Period) be deemed
to have given notice of an election to refinance such Borrowing with an ABR
Borrowing. The Administrative Agent shall promptly advise the Lenders of any
notice given pursuant to this Section 2.5 and of each Lender's portion of the
requested Borrowing.
SECTION 2.6. Refinancings.
The Borrower may refinance all or any part of any Borrowing
with a Borrowing of the same or a different Interest Rate Type pursuant to a
Borrowing Request under Section 2.5, subject to the conditions and limitations
set forth herein and elsewhere in this Agreement; provided, however, that at
any time after the occurrence, and during the continuation, of a Default or an
Event of Default, a Borrowing or portion thereof may only be refinanced with an
ABR Borrowing. Any Borrowing or part thereof so refinanced shall be deemed to
be repaid in accordance with Section 2.8 with the proceeds of a new Borrowing
hereunder and the proceeds of the new Borrowing, which will repay the Borrowing
being refinanced, shall not be paid by the Lenders to the Administrative Agent
or by the Administrative Agent to the Borrower, and each new Borrowing will
merely reflect a new or continued interest rate option.
SECTION 2.7. Fees.
(a) The Borrower agrees to pay the Administrative Agent, for
its own account, the fees at the times and in the amounts provided for in the
letter agreement dated January 22, 1999 among the Borrower, Chase and Chase
Securities Inc.
(b) All fees shall be paid on the dates due, in immediately
available funds, to the Administrative Agent for distribution, if and as
appropriate, among the Lenders. Once paid, none of the fees shall be refundable
under any circumstances.
SECTION 2.8. Repayment of Term Loans; Evidence of
Debt.
(a) The Term Loans shall mature in five consecutive quarterly
installments occurring on February 9, 2000, May 9, 2000, August 9, 2000,
November 9, 2000 and February 9, 2001. Each such installment shall be in the
amount of $250,000,000.
(b) The Borrower hereby unconditionally promises to pay to
the Administrative Agent for the account of each Lender the then unpaid
principal amount of each Term Loan of such Lender on the dates and in the
amounts set forth in paragraph (a) above (or such earlier date on which the
Term Loans become due and payable pursuant to Article 7). The Borrower hereby
further agrees to
- 17 -
pay interest on the unpaid principal amount of the Term Loans from time to time
outstanding from the date hereof until payment in full thereof at the rates per
annum, and on the dates, set forth in Section 2.9.
(c) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing indebtedness of the Borrower to such
Lender resulting from the Term Loans of such Lender, including the amounts of
principal and interest payable and paid to such Lender from time to time under
this Agreement.
(d) The Administrative Agent shall maintain the Register
pursuant to Section 9.3(e), and a subaccount therein for each Lender, in which
shall be recorded (i) the amount of each Term Loan made hereunder, the Interest
Rate Type thereof and each Interest Period applicable thereto, (ii) the amount
of any principal or interest due and payable or to become due and payable from
the Borrower to each Lender hereunder and (iii) both the amount of any sum
received by the Administrative Agent hereunder from the Borrower and each
Lender's share thereof.
(e) The entries made in the Register and the accounts of each
Lender maintained pursuant to Section 2.8 shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided, however, that the
failure of any Lender or the Administrative Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
obligation of the Borrower to repay (with applicable interest) the Term Loans
made to the Borrower by such Lender in accordance with the terms of this
Agreement.
(f) The Borrower agrees that, upon the request to the
Administrative Agent by any Lender, the Borrower will execute and deliver to
such Lender a promissory note of the Borrower evidencing the Term Loans of such
Lender, substantially in the form of Exhibit A with appropriate insertions as
to date and principal amount (a "Term Note").
SECTION 2.9. Interest on Term Loans.
(a) Subject to the provisions of Section 2.10, the Term Loans
comprising each LIBOR Borrowing shall bear interest (computed on the basis of
the actual number of days elapsed over a year of 360 days) at a rate per annum
equal to LIBOR for the Interest Period in effect for such Borrowing plus the
Applicable Margin therefor from time to time in effect. Interest on each LIBOR
Borrowing shall be payable on each applicable Interest Payment Date.
(b) Subject to the provisions of Section 2.10, the Term Loans
comprising each ABR Borrowing shall bear interest (computed on the basis of the
actual number of days elapsed over a year of 365 or 366 days, as the case may
be, when determined by
- 18 -
reference to the Prime Rate and over a year of 360 days at all other times) at
a rate per annum equal to the Alternate Base Rate plus the Applicable Margin
therefor from time to time in effect.
(c) Interest on each Term Loan shall be payable in arrears on
each Interest Payment Date applicable to such Term Loan. LIBOR or the Alternate
Base Rate for each Interest Period or day within an Interest Period shall be
determined by the Administrative Agent, and such determination shall be
conclusive absent manifest error.
SECTION 2.10. Interest on Overdue Amounts.
If the Borrower shall default in the payment of the principal
of, or interest on, any Term Loan or any other amount becoming due hereunder,
the Borrower shall on demand from time to time pay interest, to the extent
permitted by Applicable Law, on such defaulted amount up to (but not including)
the date of actual payment (after as well as before judgment) at a rate per
annum computed on the basis of the actual number of days elapsed over a year of
365 or 366 days, as applicable, in the case of amounts bearing interest
determined by reference to the Prime Rate and a year of 360 days in all other
cases, equal to (a) in the case of the remainder of the then current Interest
Period for any LIBOR Loan, the rate applicable to such Term Loan under Section
2.9 plus 2% per annum and (b) in the case of any other amount, the rate that
would at the time be applicable to an ABR Loan under Section 2.9 plus 2% per
annum.
SECTION 2.11. Alternate Rate of Interest.
In the event, and on each occasion, that on the day two
Business Days prior to the commencement of any Interest Period for a LIBOR
Loan, the Administrative Agent shall have determined that Dollar deposits in
the amount of the requested principal amount of such LIBOR Loan are not
generally available in the London Interbank Market, or that the rate at which
such Dollar deposits are being offered will not adequately and fairly reflect
the cost to any Lender of making or maintaining its portion of such LIBOR Loans
during such Interest Period, or that reasonable means do not exist for
ascertaining LIBOR, the Administrative Agent shall, as soon as practicable
thereafter, give written or telecopier notice of such determination to the
Borrower and the Lenders. In the event of any such determination, until the
Administrative Agent shall have determined that circumstances giving rise to
such notice no longer exist, any request by the Borrower for a LIBOR Borrowing
pursuant to Section 2.5 shall be deemed to be a request for an ABR Loan. Each
determination by the Administrative Agent hereunder shall be conclusive absent
manifest error.
SECTION 2.12. Reserved.
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SECTION 2.13. Prepayment of Term Loans.
(a) Prior to the Maturity Date, the Borrower shall have the
right at any time to prepay any Borrowing, in whole or in part, subject to the
requirements of Section 2.17 but otherwise without premium or penalty, upon
prior written or telecopy notice to the Administrative Agent before 12:00 noon
New York City time at least one Business Day in the case of an ABR Loan and at
least three Business Days in the case of a LIBOR Loan; provided, however, that
each such partial prepayment shall be in an integral multiple of $5,000,000 and
in a minimum aggregate principal amount of $10,000,000.
(b) Each notice of prepayment pursuant to Section 2.13 shall
specify the specific Borrowing(s), the prepayment date and the aggregate
principal amount of each Borrowing to be prepaid, shall be irrevocable and
shall commit the Borrower to prepay such Borrowing(s) by the amount stated
therein. All prepayments under this Section 2.13 shall be accompanied by the
payment of unpaid accrued interest on the principal amount being prepaid to the
date of prepayment. Prepayments of the Term Loans shall be applied to the
remaining installments thereof in the direct order of maturity. Any amounts
prepaid pursuant to this Section 2.13 may not be reborrowed.
SECTION 2.14. Eurodollar Reserve Costs.
The Borrower shall pay to the Administrative Agent for the
account of each Lender, so long as such Lender shall be required under
regulations of the Board to maintain reserves with respect to liabilities or
assets consisting of, or including, Eurocurrency Liabilities (as defined in
Regulation D of the Board), additional interest on the unpaid principal amount
of each LIBOR Loan made to the Borrower by such Lender, from the date of such
Term Loan until such Term Loan is paid in full, at an interest rate per annum
equal at all times during each Interest Period for such Term Loan to the
remainder obtained by subtracting (i) LIBOR for such Interest Period from (ii)
the rate obtained by multiplying LIBOR as referred to in clause (i) above by
the Statutory Reserves of such Lender for such Interest Period. Such additional
interest shall be determined by such Lender and notified to the Borrower (with
a copy to the Administrative Agent) not later than five Business Days before
the next Interest Payment Date for such Term Loan, and such additional interest
so notified to the Borrower by any Lender shall be payable to the
Administrative Agent for the account of such Lender on each Interest Payment
Date for such Term Loan.
SECTION 2.15. Reserve Requirements; Change in
Circumstances.
(a) Notwithstanding any other provision herein, if after the
date of this Agreement any change in Applicable Law or
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regulation or in the interpretation or administration thereof by any
Governmental Authority charged with the interpretation or administration
thereof (whether or not having the force of law) (i) shall subject any Lender
to, or increase the net amount of, any tax, levy, impost, duty, charge, fee,
deduction or withholding with respect to any LIBOR Loan, or shall change the
basis of taxation of payments to any Lender of the principal of or interest on
any LIBOR Loan made by such Lender or any other fees or amounts payable
hereunder (other than (x) taxes imposed on the overall net income of such
Lender by the jurisdiction in which such Lender has its principal office or its
applicable Lending Office or by any political subdivision or taxing authority
therein (or any tax which is enacted or adopted by such jurisdiction, political
subdivision or taxing authority as a direct substitute for any such taxes) or
(y) any tax, assessment, or other governmental charge that would not have been
imposed but for the failure of any Lender to comply with any certification,
information, documentation or other reporting requirement), (ii) shall impose,
modify or deem applicable any reserve, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit extended by,
any Lender, or (iii) shall impose on any Lender or the London Interbank Market
any other condition affecting this Agreement or any LIBOR Loan made by such
Lender, and the result of any of the foregoing shall be to increase the cost to
such Lender of making or maintaining any LIBOR Loan or to reduce the amount of
any sum received or receivable by such Lender hereunder (whether of principal,
interest or otherwise) in respect thereof by an amount deemed in good faith by
such Lender to be material, then the Borrower shall pay such additional amount
or amounts as will compensate such Lender for such increase or reduction to
such Lender upon demand by such Lender.
(b) If, after the date of this Agreement, any Lender shall
have determined in good faith that the adoption after the date hereof of any
applicable law, rule, regulation or guideline regarding capital adequacy, or
any change therein, or any change in the interpretation or administration
thereof by any Governmental Authority, central bank or comparable agency
charged with the interpretation or administration thereof, or compliance by any
Lender (or any Lending Office of such Lender) with any request or directive
regarding capital adequacy (whether or not having the force of law) of any such
Governmental Authority, central bank or comparable agency, has or would have
the effect of reducing the rate of return on such Lender's capital or on the
capital of the Lender's holding company, if any, as a consequence of its
obligations hereunder to a level below that which such Lender (or its holding
company) could have achieved but for such applicability, adoption, change or
compliance (taking into consideration such Lender's policies or the policies of
its holding company, as the case may be, with respect to capital adequacy) by
an amount deemed by such Lender to be material, then, from time to time, the
Borrower shall pay to the Administrative Agent for the account of such Lender
such
- 21 -
additional amount or amounts as will compensate such Lender for such reduction
upon demand by such Lender.
(c) A certificate of a Lender setting forth in reasonable
detail (i) such amount or amounts as shall be necessary to compensate such
Lender as specified in paragraph (a) or (b) above, as the case may be, and (ii)
the calculation of such amount or amounts referred to in the preceding clause
(i), shall be delivered to the Borrower and shall be conclusive absent manifest
error. The Borrower shall pay the Administrative Agent for the account of such
Lender the amount shown as due on any such certificate within 10 Business Days
after its receipt of the same.
(d) Failure on the part of any Lender to demand compensation
for any increased costs or reduction in amounts received or receivable or
reduction in return on capital with respect to any Interest Period shall not
constitute a waiver of such Lender's rights to demand compensation for any
increased costs or reduction in amounts received or receivable or reduction in
return on capital with respect to such Interest Period or any other Interest
Period. The protection of this Section 2.14 shall be available to each Lender
regardless of any possible contention of invalidity or inapplicability of the
law, regulation or condition which shall have been imposed.
(e) Each Lender agrees that, as promptly as practicable after
it becomes aware of the occurrence of an event or the existence of a condition
that (i) would cause it to incur any increased cost under this Section 2.15,
Section 2.16 or Section 2.21 or (ii) would require the Borrower to pay an
increased amount under this Section 2.15, Section 2.16 or Section 2.21, it will
use reasonable efforts to notify the Borrower of such event or condition and,
to the extent not inconsistent with such Lender's internal policies, will use
its reasonable efforts to make, fund or maintain the affected Term Loans of
such Lender through another Lending Office of such Lender if as a result
thereof the additional monies which would otherwise be required to be paid or
the reduction of amounts receivable by such Lender thereunder in respect of
such Term Loans would be materially reduced, or any inability to perform would
cease to exist, or the increased costs which would otherwise be required to be
paid in respect of such Term Loans pursuant to this Section 2.15, Section 2.16
or Section 2.21 would be materially reduced or the taxes or other amounts
otherwise payable under this Section 2.15, Section 2.16 or Section 2.21 would
be materially reduced, and if, as determined by such Lender, in its sole
discretion, the making, funding or maintaining of such Term Loans through such
other Lending Office would not otherwise materially adversely affect such Term
Loans or such Lender.
(f) In the event any Lender shall have delivered to the
Borrower a notice that LIBOR Loans are no longer available from such Lender
pursuant to Section 2.16, that amounts are due
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to such Lender pursuant to paragraph (c) hereof or that any of the events
designated in paragraph (e) hereof have occurred, the Borrower may (but subject
in any such case to the payments required by Section 2.17), provided that there
shall exist no Default or Event of Default, upon at least five Business Days'
prior written or telecopier notice to such Lender and the Administrative Agent,
but not more than 30 days after receipt of notice from such Lender, identify to
the Administrative Agent a lending institution reasonably acceptable to the
Administrative Agent which will purchase the amount of outstanding Term Loans
from the Lender providing such notice and such Lender shall thereupon assign
any Term Loans owing to such Lender and Term Notes held by such Lender to such
replacement lending institution pursuant to Section 9.3. Such notice shall
specify an effective date for such assignment and at the time thereof, the
Borrower shall pay all accrued interest and all other amounts (including
without limitation all amounts payable under this Section) owing hereunder to
such Lender as at such effective date for such assignment.
SECTION 2.16. Change in Legality.
(a) Notwithstanding anything to the contrary herein
contained, if any change in any law or regulation or in the interpretation
thereof by any Governmental Authority charged with the administration or
interpretation thereof shall make it unlawful for any Lender to make or
maintain any LIBOR Loan or to give effect to its obligations as contemplated
hereby, then, by written notice to the Borrower and to the Administrative
Agent, such Lender may:
(i) declare that LIBOR Loans will not thereafter be made
by such Lender hereunder, whereupon the Borrower shall be prohibited
from requesting LIBOR Loans from such Lender hereunder unless such
declaration is subsequently withdrawn; and
(ii) require that all outstanding LIBOR Loans made by it
be converted to ABR Loans, in which event (A) all such LIBOR Loans
shall be automatically converted to ABR Loans as of the effective date
of such notice as provided in Section 2.16(b) and (B) all payments and
prepayments of principal which would otherwise have been applied to
repay the converted LIBOR Loans shall instead be applied to repay the
ABR Loans resulting from the conversion of such LIBOR Loans.
(b) For purposes of this Section 2.16, a notice to the
Borrower by any Lender pursuant to Section 2.16(a) shall be effective on the
date of receipt thereof by the Borrower.
SECTION 2.17. Reimbursement of Lenders.
(a) The Borrower shall reimburse each Lender on demand for
any loss incurred or to be incurred by it in the reemployment
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of the funds released (i) by any prepayment (for any reason) or refinancing of
any LIBOR Loan if such LIBOR Loan is repaid or refinanced other than on the
last day of the applicable Interest Period for such Term Loan or (ii) in the
event that after the Borrower delivers a notice of borrowing under Section 2.5
in respect of LIBOR Loans, the applicable Term Loan is not made on the first
day of the Interest Period specified by the Borrower for any reason other than
(I) a suspension or limitation under Section 2.16 of the right of the Borrower
to select a LIBOR Loan or (II) a breach by a Lender of its obligations
hereunder. In the case of such failure to borrow, such loss shall be the amount
as reasonably determined by such Lender as the excess, if any of (A) the amount
of interest which would have accrued to such Lender on the amount not borrowed,
at a rate of interest equal to the interest rate applicable to such Term Loan
pursuant to Section 2.9, for the period from the date of such failure to
borrow, to the last day of the Interest Period for such Term Loan which would
have commenced on the date of such failure to borrow, over (B) the amount
realized by such Lender in reemploying the funds not advanced during the period
referred to above. In the case of a payment other than on the last day of the
Interest Period for a Term Loan, such loss shall be the amount as reasonably
determined by the Administrative Agent as the excess, if any, of (A) the amount
of interest which would have accrued on the amount so paid at a rate of
interest equal to the interest rate applicable to such Term Loan pursuant to
Section 2.9, for the period from the date of such payment to the last day of
the then current Interest Period for such Term Loan, over (B) the amount equal
to the product of (x) the amount of the Term Loan so paid times (y) the current
daily yield on U.S. Treasury Securities (at such date of determination) with
maturities approximately equal to the remaining Interest Period for such Term
Loan times (z) the number of days remaining in the Interest Period for such
Term Loan. Each Lender shall deliver to the Borrower from time to time one or
more certificates setting forth the amount of such loss (and in reasonable
detail the manner of computation thereof) as determined by such Lender, which
certificates shall be conclusive absent manifest error. The Borrower shall pay
to the Administrative Agent for the account of each Lender the amount shown as
due on any certificate within thirty (30) days after its receipt of the same.
(b) In the event the Borrower fails to prepay any Term Loan
on the date specified in any prepayment notice delivered pursuant to Section
2.13(a), the Borrower on demand by any Lender shall pay to the Administrative
Agent for the account of such Lender any amounts required to compensate such
Lender for any loss incurred by such Lender as a result of such failure to
prepay, including, without limitation, any loss, cost or expenses incurred by
reason of the acquisition of deposits or other funds by such Lender to fulfill
deposit obligations incurred in anticipation of such prepayment. Each Lender
shall deliver to the Borrower and the Administrative Agent from time to time
one or more certificates setting forth the amount of such loss (and
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in reasonable detail the manner of computation thereof) as determined by such
Lender, which certificates shall be conclusive absent manifest error.
SECTION 2.18. Pro Rata Treatment.
Except as permitted or required under Sections 2.14, 2.15(c),
2.16 and 2.17, each Borrowing, each payment or prepayment of principal of any
Borrowing, each payment of interest on the Term Loans and each refinancing of
any Borrowing with, or conversion of any Borrowing to, another Borrowing, or
continuation of any Borrowing, shall be allocated pro rata among the Lenders in
accordance with the respective principal amount of their outstanding Term
Loans. Each Lender agrees that in computing such Lender's portion of any
Borrowing to be made hereunder, the Administrative Agent may, in its
discretion, round each Lender's percentage of such Borrowing computed in
accordance with Section 2.1, to the next higher or lower whole dollar amount.
SECTION 2.19. Right of Setoff.
If any Event of Default shall have occurred and be continuing
and any Lender shall have requested the Administrative Agent to declare the
Term Loans immediately due and payable pursuant to Article 7, each Lender is
hereby authorized at any time and from time to time, to the fullest extent
permitted by Applicable Law, to set off and apply any and all deposits (general
or special, time or demand, provisional or final) at any time held by such
Lender and any other indebtedness at any time owing by such Lender to, or for
the credit or the account of, the Borrower, against any of and all the
obligations now or hereafter existing under this Agreement and the Term Loans
held by such Lender, irrespective of whether or not such Lender shall have made
any demand under this Agreement or such Term Loans and although such
Obligations may be unmatured. Each Lender agrees promptly to notify the
Borrower after any such setoff and application made by such Lender, but the
failure to give such notice shall not affect the validity of such setoff and
application. The rights of each Lender under this Section 2.19 are in addition
to other rights and remedies (including other rights of setoff) which such
Lender may have.
SECTION 2.20. Manner of Payments.
All payments by the Borrower hereunder and under the Term
Notes shall be made in Dollars in Federal or other immediately available funds
at the office of the Administrative Agent's Agent Bank Services Department, 1
Chase Xxxxxxxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx
Xxxx, for credit to Cendant Corporation Clearing Account, Account No. 144812905
(Reference: Cendant Corporation Term Loan Agreement dated as of February 9,
1999), or to such other address or account as the Administrative Agent shall
from time to time
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notify the Borrower, no later than 12:00 noon, New York City time, on the date
on which such payment shall be due. Interest in respect of any Term Loan
hereunder shall accrue from and including the date of such Term Loan to, but
excluding, the date on which such Term Loan is paid or refinanced with a Term
Loan of a different Interest Rate Type.
SECTION 2.21. United States Withholding.
(a) Prior to the date of the initial Term Loans hereunder,
and from time to time thereafter if requested by the Borrower or the
Administrative Agent or required because, as a result of a change in Applicable
Law or a change in circumstances or otherwise, a previously delivered form or
statement becomes incomplete or incorrect in any material respect, each Lender
organized under the laws of a jurisdiction outside the United States shall
provide, if applicable, the Administrative Agent and the Borrower with
complete, accurate and duly executed forms or other statements prescribed by
the Internal Revenue Service of the United States certifying such Lender's
exemption from, or entitlement to a reduced rate of, United States withholding
taxes (including backup withholding taxes) with respect to all payments to be
made to such Lender hereunder and under the Term Notes.
(b) The Borrower and the Administrative Agent shall be
entitled to deduct and withhold any and all present or future taxes or
withholdings, and all liabilities with respect thereto, from payments hereunder
or under the Term Notes, if and to the extent that the Borrower or the
Administrative Agent in good faith determines that such deduction or
withholding is required by the law of the United States, including, without
limitation, any applicable treaty of the United States. In the event the
Borrower or the Administrative Agent shall so determine that deduction or
withholding of taxes is required, it shall advise the affected Lender as to the
basis of such determination prior to actually deducting and withholding such
taxes. In the event the Borrower or the Administrative Agent shall so deduct or
withhold taxes from amounts payable hereunder, it (i) shall pay to or deposit
with the appropriate taxing authority in a timely manner the full amount of
taxes it has deducted or withheld; (ii) shall provide evidence of payment of
such taxes to, or the deposit thereof with, the appropriate taxing authority
and a statement setting forth the amount of taxes deducted or withheld, the
applicable rate, and any other information or documentation reasonably
requested by the Lenders from whom the taxes were deducted or withheld; and
(iii) shall forward to such Lenders any receipt for such payment or deposit of
the deducted or withheld taxes as may be issued from time to time by the
appropriate taxing authority. Unless the Borrower and the Administrative Agent
have received forms or other documents satisfactory to them indicating that
payments hereunder or under the Term Notes are not subject to United States
withholding tax or are subject to such tax at a rate reduced by an applicable
tax treaty, the Borrower or the Administrative Agent may withhold taxes from
such
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payments at the applicable statutory rate in the case of payments to or for any
Lender organized under the laws of a jurisdiction outside the United States.
(c) Each Lender agrees (i) that as between it and the
Borrower or the Administrative Agent, it shall be the Person to deduct and
withhold taxes, and to the extent required by law it shall deduct and withhold
taxes, on amounts that such Lender may remit to any other Person(s) by reason
of any undisclosed transfer or assignment of an interest in this Agreement to
such other Person(s) pursuant to paragraph (g) of Section 9.3 and (ii) to
indemnify the Borrower and the Administrative Agent and any officers,
directors, agents, or employees of the Borrower or the Administrative Agent
against, and to hold them harmless from, any tax, interest, additions to tax,
penalties, reasonable counsel and accountants' fees, disbursements or payments
arising from the assertion by any appropriate taxing authority of any claim
against them relating to a failure to withhold taxes as required by Applicable
Law with respect to amounts described in clause (i) of this paragraph (c).
(d) Each assignee of a Lender's interest in this Agreement in
conformity with Section 9.3 shall be bound by this Section 2.21, so that such
assignee will have all of the obligations and provide all of the forms and
statements and all indemnities, representations and warranties required to be
given under this Section 2.21.
(e) In the event that any withholding taxes shall become
payable solely as a result of any change in any statute, treaty, ruling,
determination or regulation occurring after the Initial Date in respect of any
sum payable hereunder or under any other Fundamental Document to any Lender or
the Administrative Agent (i) the sum payable by the Borrower shall be increased
as may be necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section 2.21) such
Lender or the Administrative Agent (as the case may be) receives an amount
equal to the sum it would have received had no such deductions been made, (ii)
the Borrower shall make such deductions and (iii) the Borrower shall pay the
full amount deducted to the relevant taxation authority or other authority in
accordance with Applicable Law. For purposes of this Section 2.21, the term
"Initial Date" shall mean (i) in the case of the Administrative Agent, the date
hereof, (ii) in the case of each Lender as of the date hereof, the date hereof
and (iii) in the case of any other Lender, the effective date of the Assignment
and Acceptance pursuant to which it became a Lender.
SECTION 2.22. Certain Pricing Adjustments.
For any day that the S&P rating of the Borrower's senior
unsecured long-term debt is less than BBB- and the Xxxxx'x rating of the
Borrower's senior unsecured long-term debt is less than Baa3 (or the Borrower's
senior unsecured debt is not rated
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by at least one of S&P and Xxxxx'x), the Applicable Margin will increase by 50
basis points. In the event that the Borrower's senior unsecured long-term debt
is rated by only one of S&P and Xxxxx'x, then that single rating shall be
determinative. The Borrower shall cause its senior unsecured long-term debt to
be rated by either S&P or Xxxxx'x. Any reduction of any such rating shall
become effective on the date of announcement or publication by the Borrower or
either such rating agency of a reduction in such rating or, in the absence of
such announcement or publication, on the effective date of such decreased
rating, or on the date of any request by the Borrower to either of such rating
agencies not to rate its senior unsecured long-term debt or on the date either
of such rating agencies announces it shall no longer rate the Borrower's senior
unsecured long-term debt. Any increase of any such rating shall be effective on
the date of announcement or publication by either of such rating agencies of an
increase in rating or in the absence of announcement or publication on the
effective date of such increase in rating.
3. REPRESENTATIONS AND WARRANTIES OF BORROWER
In order to induce the Lenders to enter into this Agreement
and to make the Term Loans provided for herein, the Borrower makes the
following representations and warranties to the Administrative Agent and the
Lenders, all of which shall survive the execution and delivery of this
Agreement, the issuance of the Term Notes and the making of the Term Loans:
SECTION 3.1. Corporate Existence and Power.
The Borrower and its Subsidiaries have been duly organized
and are validly existing in good standing under the laws of their respective
jurisdictions of incorporation and are in good standing or have applied for
authority to operate as a foreign corporation in all jurisdictions where the
nature of their properties or business so requires it and where a failure to be
in good standing as a foreign corporation would have a Material Adverse Effect.
The Borrower has the corporate power to execute, deliver and perform its
obligations under this Agreement and the other Fundamental Documents and other
documents contemplated hereby and to borrow hereunder.
SECTION 3.2. Corporate Authority, No Violation and
Compliance with Law.
The execution, delivery and performance of this Agreement and
the other Fundamental Documents and the borrowings hereunder (a) have been duly
authorized by all necessary corporate action on the part of the Borrower, (b)
will not violate any provision of any Applicable Law (including any laws
related to franchising) applicable to the Borrower or any of its Subsidiaries
or any of their respective properties or assets, (c) will not violate any
provision of the Certificate of Incorporation or By-Laws of the Borrower or any
of its Subsidiaries, or any indenture, any agreement for borrowed money, any
bond, note or other similar instrument or any other material agreement to which
the Borrower or any of its Subsidiaries is a party or by which the Borrower or
any of its
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Subsidiaries or any of their respective properties or assets are bound, (d)
will not be in conflict with, result in a breach of, or constitute (with due
notice or lapse of time or both) a default under, any material indenture,
agreement, bond, note or instrument and (e) will not result in the creation or
imposition of any Lien upon any property or assets of the Borrower or any of
its Subsidiaries other than pursuant to this Agreement or any other Fundamental
Document.
SECTION 3.3. Governmental and Other Approval and
Consents.
No action, consent or approval of, or registration or filing
with, or any other action by, any governmental agency, bureau, commission or
court is required in connection with the execution, delivery and performance by
the Borrower of this Agreement or the other Fundamental Documents.
SECTION 3.4. Financial Statements of Borrower.
The (a) revised audited financial statements of the Borrower
and its Consolidated Subsidiaries as of December 31, 1997, and (b) unaudited
consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as
of September 30, 1998, together with the related unaudited statements of
income, shareholders' equity and cash flows for the nine-month period then
ended, fairly present the financial condition of the Borrower and its
Consolidated Subsidiaries as at the dates indicated and the results of
operations and cash flows for the periods indicated in conformity with GAAP
subject to normal year-end adjustments in the case of the September 30, 1998
financial statements.
SECTION 3.5. No Material Adverse Change.
Since December 31, 1997 no events and conditions have
occurred that have had, or that could reasonably be expected to have, a
Material Adverse Effect.
SECTION 3.6. INTENTIONALLY OMITTED.
SECTION 3.7. Copyrights, Patents and Other Rights.
Each of the Borrower and its Subsidiaries owns, or is
licensed to use, all trademarks, tradenames, copyrights, patents and other
intellectual property material to its business, and the use thereof by the
Borrower and its Subsidiaries does not infringe upon the rights of any other
Person, except for any such infringements that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
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SECTION 3.8. Title to Properties.
Each of the Borrower and its Material Subsidiaries will have
at the Closing Date good title or valid leasehold interests to each of the
properties and assets reflected on the balance sheets referred to in Section
3.4, except for minor defects in title that do not interfere with its ability
to conduct its business as currently conducted or to utilize such properties
for their intended purposes, and all such properties and assets will be free
and clear of Liens, except Permitted Encumbrances.
SECTION 3.9. Litigation.
Except as set forth on Schedule 3.9, there are no lawsuits or
other proceedings pending (including, but not limited to, matters relating to
environmental liability), or, to the knowledge of the Borrower, threatened,
against or affecting the Borrower or any of its Subsidiaries or any of their
respective properties, by or before any Governmental Authority or arbitrator,
which could reasonably be expected to have a Material Adverse Effect. Neither
the Borrower nor any of its Subsidiaries is in default with respect to any
order, writ, injunction, decree, rule or regulation of any Governmental
Authority, which default would have a Material Adverse Effect.
SECTION 3.10. Federal Reserve Regulations.
Neither the Borrower nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying any Margin Stock. No
part of the proceeds of the Term Loans will be used, whether immediately,
incidentally or ultimately, for any purpose violative of or inconsistent with
any of the provisions of Regulation T, U or X of the Board.
SECTION 3.11. Investment Company Act.
The Borrower is not, and will not during the term of this
Agreement be, (x) an "investment company", within the meaning of the Investment
Company Act of 1940, as amended, or (y) subject to regulation under the Public
Utility Holding Company Act of 1935, as amended, or the Federal Power Act, as
amended.
SECTION 3.12. Enforceability.
This Agreement and the other Fundamental Documents to which
the Borrower is a party when executed will constitute legal, valid and
enforceable obligations (as applicable) of the Borrower (subject, as to
enforcement, to applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting the enforcement of creditors' rights generally
and to general principles of equity).
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SECTION 3.13. Taxes.
The Borrower and each of its Subsidiaries has filed or caused
to be filed all federal, state and local tax returns which are required to be
filed, and has paid or has caused to be paid all taxes as shown on said returns
or on any assessment received by them in writing, to the extent that such taxes
have become due, except (a) as permitted by Section 5.4 hereof or (b) to the
extent that the failure to do so could not reasonably be expected to result in
a Material Adverse Effect.
SECTION 3.14. Compliance with ERISA.
Each of the Borrower and its Subsidiaries is in compliance in
all material respects with the provisions of ERISA and the Code applicable to
Plans, and the regulations and published interpretations thereunder, if any,
which are applicable to it. Neither the Borrower nor any of its Subsidiaries
has, with respect to any Plan established or maintained by it, engaged in a
prohibited transaction which would subject it to a material tax or penalty on
prohibited transactions imposed by ERISA or Section 4975 of the Code. No
liability to the PBGC that is material to the Borrower and its Subsidiaries
taken as a whole has been, or to the Borrower's best knowledge is reasonably
expected to be, incurred with respect to the Plans and there has been no
Reportable Event and no other event or condition that presents a material risk
of termination of a Plan by the PBGC. Neither the Borrower nor any of its
Subsidiaries has engaged in a transaction which would result in the incurrence
of a material liability under Section 4069 of ERISA. As of the Closing Date,
neither the Borrower nor any of its Subsidiaries contributes to a Multiemployer
Plan, and has not incurred any liability that would be material to the Borrower
and its Subsidiaries taken as a whole on account of a partial or complete
withdrawal (as defined in Sections 4203 and 4205 of ERISA, respectively) with
respect to any Multiemployer Plan.
SECTION 3.15. Disclosure.
As of the Closing Date, neither this Agreement nor the
Confidential Information Memorandum dated January 1999, at the time it was
furnished, contained any untrue statement of a material fact or omitted to
state a material fact, under the circumstances under which it was made,
necessary in order to make the statements contained herein or therein not
misleading. At the Closing Date, there is no fact known to the Borrower which,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. The Borrower has delivered to the Administrative Agent
certain projections relating to the Borrower and its Consolidated Subsidiaries.
Such projections are based on good faith estimates and assumptions believed to
be reasonable at the time made, provided, however, that the Borrower makes no
representation or warranty that such assumptions will prove in the future to be
accurate or that the Borrower and its
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Consolidated Subsidiaries will achieve the financial results reflected in such
projections.
SECTION 3.16. Environmental Liabilities.
Except with respect to any matters, that, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Effect, neither the Borrower nor any of its Subsidiaries (i) has failed to
comply with any Environmental Law or to obtain, maintain or comply with any
permit, license or other approval required under any Environmental Law, (ii)
except as set forth on Schedule 3.16, has become subject to any Environmental
Liability, (iii) except as set forth on Schedule 3.16, has received notice of
any claim with respect to any Environmental Liability or (iv) except as set
forth on Schedule 3.16, knows of any basis for any Environmental Liability.
4. CONDITIONS OF LENDING
SECTION 4.1. Conditions Precedent to Term Loans.
The obligation of each Lender to make its Term Loan is
subject to the following conditions precedent:
(a) Loan Documents. The Administrative Agent shall have
received this Agreement and each of the other Fundamental Documents,
each executed and delivered by a duly authorized officer of the
Borrower.
(b) Corporate Documents for the Borrower. The Administrative
Agent shall have received, with copies for each of the Lenders, a
certificate of the Secretary or Assistant Secretary of the Borrower
dated the date of the initial Term Loans and certifying (A) that
attached thereto is a true and complete copy of the certificate of
incorporation and by-laws of the Borrower as in effect on the date of
such certification; (B) that attached thereto is a true and complete
copy of resolutions adopted by the Board of Directors of the Borrower
authorizing the borrowings hereunder and the execution, delivery and
performance in accordance with their respective terms of this
Agreement and any other documents required or contemplated hereunder;
and (C) as to the incumbency and specimen signature of each officer of
the Borrower executing this Agreement or any other document delivered
by it in connection herewith (such certificate to contain a
certification by another officer of the Borrower as to the incumbency
and signature of the officer signing the certificate referred to in
this paragraph (b)).
(c) Financial Statements. The Lenders shall have received the
financial statements of the Borrower refered to in Section 3.4.
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(d) Opinions of Counsel. The Administrative Agent shall have
received the favorable written opinions, dated the date of the initial
Term Loans and addressed to the Administrative Agent and the Lenders,
of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel to the Borrower
and of the General Counsel or Vice President, Legal of the Borrower,
substantially in the form of Exhibits B-1 and B-2 hereto,
respectively.
(e) No Material Adverse Change. The Administrative Agent
shall be satisfied that since December 31, 1997 no events and
conditions have occurred that have had, or could reasonably be
expected to have, a Material Adverse Effect.
(f) Payment of Fees. The Administrative Agent shall be
satisfied that all amounts payable to the Administrative Agent and the
other Lenders pursuant hereto or with regard to the transactions
contemplated hereby have been or are simultaneously being paid.
(g) Litigation. No litigation shall be pending or threatened
which would be likely to have a Material Adverse Effect, or which
could reasonably be expected to materially adversely affect the
ability of the Borrower to fulfill its obligations hereunder.
(h) Officer's Certificate. The Administrative Agent shall
have received a certificate of the Borrower's chief executive officer
or chief financial officer certifying, as of the date of the making of
the initial Term Loans, compliance with the conditions set forth in
paragraphs (l) and (m) of this Section 4.1.
(i) Existing Term Loan Agreement. All loans and other amounts
owed under the Existing Term Loan Agreement shall be repaid on the
Closing Date, and the Existing Term Loan Agreement shall be
terminated.
(j) Other Documents. The Administrative Agent shall have
received such other documents as the Administrative Agent may
reasonably require.
(k) Notice. The Administrative Agent shall have received a
notice with respect to such Term Loan as required by Article 2 hereof.
(l) Representations and Warranties. The representations and
warranties set forth in Article 3 hereof and in the other Fundamental
Documents shall be true and correct in all material respects on and as
of the date of the initial Term Loans hereunder (except to the extent
that such representations and warranties expressly relate to an
earlier date) with the same effect as if made on and as of such date.
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(m) No Event of Default. On the date of the initial Term
Loans hereunder, the Borrower shall be in material compliance with all
of the terms and provisions set forth herein to be observed or
performed and no Event of Default or Default shall have occurred and
be continuing.
5. AFFIRMATIVE COVENANTS
From the date of the Term Loans and for so long as any amount
shall remain outstanding under any Term Note or unpaid under this Agreement,
the Borrower agrees that, unless the Required Lenders shall otherwise consent
in writing, it will, and will cause each of its Subsidiaries to:
SECTION 5.1. Financial Statements, Reports, etc.
Deliver to each Lender:
(a) As soon as is practicable, but in any event within 100
days after the end of each fiscal year of the Borrower, the audited
consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries as at the end of, and the related consolidated statements
of income, shareholders' equity and cash flows for such year, and the
corresponding figures as at the end of, and for, the preceding fiscal
year, accompanied by an opinion of Deloitte & Touche LLP or such other
independent certified public accountants of recognized standing as
shall be retained by the Borrower and satisfactory to the
Administrative Agent, which report and opinion shall be prepared in
accordance with generally accepted auditing standards relating to
reporting and which report and opinion shall (A) be unqualified as to
going concern and scope of audit and shall state that such financial
statements fairly present the financial condition of the Borrower and
its Consolidated Subsidiaries, as at the dates indicated and the
results of the operations and cash flows for the periods indicated and
(B) contain no material exceptions or qualifications except for
qualifications relating to accounting changes (with which such
independent public accountants concur) in response to FASB releases or
other authoritative pronouncements;
(b) As soon as is practicable, but in any event within 55
days after the end of each of the first three fiscal quarters of each
fiscal year, the unaudited consolidated balance sheet of the Borrower
and its Consolidated Subsidiaries, as at the end of, and the related
unaudited statements of income (or changes in financial position) for
such quarter and for the period from the beginning of the then current
fiscal year to the end of such fiscal quarter and the corresponding
figures as at the end of, and for, the corresponding period in the
preceding fiscal year, together with a certificate signed by the chief
financial officer or a vice president responsible for financial
administration of
- 34 -
the Borrower to the effect that such financial statements, while not
examined by independent public accountants, reflect, in his opinion
and in the opinion of the Borrower, all adjustments necessary to
present fairly the financial position of the Borrower and its
Consolidated Subsidiaries, as the case may be, as at the end of the
fiscal quarter and the results of their operations for the quarter
then ended in conformity with GAAP consistently applied, subject only
to year-end and audit adjustments and to the absence of footnote
disclosure;
(c) Together with the delivery of the statements referred to
in paragraphs (a) and (b) of this Section 5.1, a certificate of the
chief financial officer or a vice president responsible for financial
administration of the Borrower, substantially in the form of Exhibit D
hereto (i) stating whether or not the signer has knowledge of any
Default or Event of Default and, if so, specifying each such Default
or Event of Default of which the signer has knowledge, the nature
thereof and any action which the Borrower has taken, is taking, or
proposes to take with respect to each such condition or event and (ii)
demonstrating in reasonable detail compliance with the provisions of
Sections 6.7 and 6.8 hereof;
(d) INTENTIONALLY OMITTED;
(e) Promptly upon any executive officer of the Borrower or
any of its Subsidiaries obtaining knowledge of the occurrence of any
Default or Event of Default, a certificate of the president or chief
financial officer of the Borrower specifying the nature and period of
existence of such Default or Event of Default and what action the
Borrower has taken, is taking and proposes to take with respect
thereto;
(f) Promptly upon any executive officer of the Borrower or
any of its Subsidiaries obtaining knowledge of (i) the institution of
any action, suit, proceeding, investigation or arbitration by any
Governmental Authority or other Person against or affecting the
Borrower or any of its Subsidiaries or any of their assets, or (ii)
any material development in any such action, suit, proceeding,
investigation or arbitration (whether or not previously disclosed to
the Lenders), which, in each case might reasonably be expected to
have a Material Adverse Effect, the Borrower shall promptly give
notice thereof to the Lenders and provide such other information as
may be reasonably available to it (without waiver of any applicable
evidentiary privilege) to enable the Lenders to evaluate such
matters;
(g) With reasonable promptness, such other information and
data with respect to the Borrower and its Subsidiaries
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as from time to time may be reasonably requested by any of the
Lenders; and
(h) Together with each set of financial statements required
by paragraph (a) above, a certificate of the independent certified
public accountants rendering the report and opinion thereon (which
certificate may be limited to the extent required by accounting rules
or otherwise) (i) stating whether, in connection with their audit, any
Default or Event of Default has come to their attention, and if such a
Default or Event of Default has come to their attention, specifying
the nature and period of existence thereof, and (ii) stating that
based on their audit nothing has come to their attention which causes
them to believe that the matters specified in paragraph (c)(ii) above
for the applicable fiscal year are not stated in accordance with the
terms of this Agreement.
SECTION 5.2. Corporate Existence; Compliance with
Statutes.
Do or cause to be done all things necessary to preserve,
renew and keep in full force and effect its corporate existence, material
rights, licenses, permits and franchises and comply, except where failure to
comply, either individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, with all provisions of
Applicable Law, and all applicable restrictions imposed by, any Governmental
Authority, including without limitation, the Federal Trade Commission's
"Disclosure Requirements and Prohibitions Concerning Franchising and Business
Opportunity Ventures" as amended from time to time (16 C.F.R. xx.xx. 436.1 et
seq.) and all state laws and regulations of similar import; provided, however,
that mergers, dissolutions and liquidations permitted under Section 6.4 shall
be permitted.
SECTION 5.3. Insurance.
Maintain with financially sound and reputable insurers
insurance in such amounts and against such risks as are customarily insured
against by companies in similar businesses; provided however, that (a)
workmen's compensation insurance or similar coverage may be effected with
respect to its operations in any particular state or other jurisdiction through
an insurance fund operated by such state or jurisdiction and (b) such insurance
may contain self-insurance retention and deductible levels consistent with
normal industry practices.
SECTION 5.4. Taxes and Charges.
Duly pay and discharge, or cause to be paid and discharged,
before the same shall become delinquent, all federal, state or local taxes,
assessments, levies and other governmental charges, imposed upon the Borrower
or any of its Subsidiaries or
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their respective properties, sales and activities, or any part thereof, or upon
the income or profits therefrom, as well as all claims for labor, materials, or
supplies which if unpaid could reasonably be expected to result in a Material
Adverse Effect; provided, however, that any such tax, assessment, charge, levy
or claim need not be paid if the validity or amount thereof shall currently be
contested in good faith by appropriate proceedings and if the Borrower shall
have set aside on its books reserves (the presentation of which is segregated
to the extent required by GAAP) adequate with respect thereto if reserves shall
be deemed necessary by the Borrower in accordance with GAAP; and provided,
further, that the Borrower will pay all such taxes, assessments, levies or
other governmental charges forthwith upon the commencement of proceedings to
foreclose any Lien which may have attached as security therefor (unless the
same is fully bonded or otherwise effectively stayed).
SECTION 5.5. ERISA Compliance and Reports.
Furnish to the Administrative Agent (a) as soon as possible,
and in any event within 30 days after any executive officer (as defined in
Regulation C under the Securities Act of 1933) of the Borrower knows that (i)
any Reportable Event with respect to any Plan has occurred, a statement of the
chief financial officer of the Borrower, setting forth details as to such
Reportable Event and the action which it proposes to take with respect thereto,
together with a copy of the notice, if any, required to be filed by the
Borrower or any of its Subsidiaries of such Reportable Event with the PBGC or
(ii) an accumulated funding deficiency has been incurred or an application has
been made to the Secretary of the Treasury for a waiver or modification of the
minimum funding standard or an extension of any amortization period under
Section 412 of the Code with respect to a Plan, a Plan has been or is proposed
to be terminated in a "distress termination" (as defined in Section 4041(c) of
ERISA), proceedings have been instituted to terminate a Plan or a Multiemployer
Plan, a proceeding has been instituted to collect a delinquent contribution to
a Plan or a Multiemployer Plan, or either the Borrower or any of its
Subsidiaries will incur any liability (including any contingent or secondary
liability) to or on account of the termination of or withdrawal from a Plan
under Sections 4062, 4063, 4064 of ERISA or the withdrawal or partial
withdrawal from a Multiemployer Plan under Sections 4201 or 4204 of ERISA, a
statement of the chief financial officer of the Borrower, setting forth details
an to such event and the action it proposes to take with respect thereto, (b)
promptly upon the reasonable request of the Administrative Agent, copies of
each annual and other report with respect to each Plan and (c) promptly after
receipt thereof, a copy of any notice the Borrower or any of its Subsidiaries
may receive from the PBGC relating to the PBGC's intention to terminate any
Plan or to appoint a trustee to administer any Plan; provided that the Borrower
shall not be required to notify the Administrative Agent of the occurrence of
any of the events
- 37 -
set forth in the preceding clauses (a) and (c) unless such event, individually
or in the aggregate, could reasonably be expected to result in a material
liability to the Borrower and its Subsidiaries taken as a whole.
SECTION 5.6. Maintenance of and Access to Books and
Records; Examinations.
Maintain or cause to be maintained at all times true and
complete books and records of its financial operations (in accordance with
GAAP) and provide the Administrative Agent and its representatives reasonable
access to all such books and records and to any of their properties or assets
during regular business hours, in order that the Administrative Agent may make
such audits and examinations and make abstracts from such books, accounts and
records and may discuss the affairs, finances and accounts with, and be advised
as to the same by, officers and independent accountants, all as the
Administrative Agent may deem appropriate for the purpose of verifying the
various reports delivered pursuant to this Agreement or for otherwise
ascertaining compliance with this Agreement.
SECTION 5.7. Maintenance of Properties.
Keep its properties which are material to its business in
good repair, working order and condition consistent with industry practice.
SECTION 5.8. Changes in Character of Business.
Cause the Borrower and its Subsidiaries taken as a whole to
be primarily engaged in the franchising and services businesses.
6. NEGATIVE COVENANTS
From the date of the initial Term Loan and for so long as any
amount shall remain outstanding under any Term Note or unpaid under this
Agreement, unless the Required Lenders shall otherwise consent in writing, the
Borrower agrees that it will not, nor will it permit any of its Subsidiaries
to, directly or indirectly:
SECTION 6.1. Limitation on Indebtedness.
Incur, assume or suffer to exist any Indebtedness of any
Material Subsidiary except:
(a) Indebtedness in existence on the date hereof, or required
to be incurred pursuant to a contractual obligation in existence on
the date hereof, which in either case, is listed on Schedule 6.1
hereto, but not any extensions or renewals thereof, unless effected on
substantially the same terms or on terms not more adverse to the
Lenders;
- 38 -
(b) purchase money Indebtedness (including Capital Leases) to
the extent permitted under Section 6.5(b);
(c) Guaranties;
(d) Indebtedness owing by any Material Subsidiary to the
Borrower or any other Subsidiary;
(e) Indebtedness of any Material Subsidiary of the Borrower
issued and outstanding prior to the date on which such Subsidiary
became a Subsidiary of the Borrower (other than Indebtedness issued in
connection with, or in anticipation of, such Subsidiary becoming a
Subsidiary of the Borrower); provided that immediately prior and on a
Pro Forma Basis after giving effect to, such Person becoming a
Subsidiary of the Borrower, no Default or Event of Default shall occur
or then be continuing and the aggregate principal amount of such
Indebtedness, when added to the aggregate outstanding principal amount
of Indebtedness permitted by paragraphs (f) and (g) below, shall not
exceed $400,000,000;
(f) any renewal, extension or modification of Indebtedness
under paragraph (e) above so long as (i) such renewal, extension or
modification is effected on substantially the same terms or on terms
which, in the aggregate, are not more adverse to the Lenders and (ii)
the principal amount of such Indebtedness is not increased;
(g) other Indebtedness of any Material Subsidiary in an
aggregate principal amounts which, when added to the aggregate
outstanding principal amount of Indebtedness permitted by paragraphs
(e) and (f) above, does not exceed $400,000,000; and
(h) in addition to the Indebtedness permitted by paragraphs
(a)-(g) above, Indebtedness of PHH Corporation and its Subsidiaries so
long as, after giving effect to the incurrence of such Indebtedness
and the use of the proceeds thereof, the ratio of Indebtedness of PHH
and its Subsidiaries to consolidated shareholders' equity of PHH is
less than 10 to 1.
SECTION 6.2. INTENTIONALLY OMITTED.
SECTION 6.3. Hotel Subsidiaries.
No Hotel Subsidiary shall incur or suffer to exist any
obligation to advance money to purchase securities from, or otherwise make any
investment in, any Person engaged in the gaming business.
SECTION 6.4. Consolidation, Merger, Sale of Assets.
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(a) Neither the Borrower nor any of its Material Subsidiaries
(in one transaction or series of transactions) will wind up, liquidate or
dissolve its affairs, or enter into any transaction of merger or consolidation,
except any merger, consolidation, dissolution or liquidation (i) in which the
Borrower is the surviving entity or if the Borrower is not a party to such
transaction then a Subsidiary is the surviving entity or the successor to the
Borrower has unconditionally assumed in writing all of the payment and
performance obligations of the Borrower under this Agreement and the other
Fundamental Documents, (ii) in which the surviving entity becomes a Subsidiary
of the Borrower immediately upon the effectiveness of such merger,
consolidation, dissolution or liquidation, or (iii) involving a Subsidiary in
connection with a transaction permitted by Section 6.4(b); provided, however,
that immediately prior to and on a Pro Forma Basis after giving effect to any
such transaction described in any of the preceding clauses (i), (ii) and (iii)
no Default or Event of Default has occurred and is continuing.
(b) The Borrower and its Subsidiaries (either individually or
collectively and whether in one transaction or series of related transactions)
will not sell or otherwise dispose of all or substantially all of the assets of
the Borrower and its Subsidiaries, taken as a whole.
SECTION 6.5. Limitations on Liens.
Suffer any Lien on the property of the Borrower or any of the
Material Subsidiaries, except:
(a) deposits under worker's compensation, unemployment
insurance and social security laws or to secure statutory obligations
or surety or appeal bonds or performance or other similar bonds in the
ordinary course of business, or statutory Liens of landlords,
carriers, warehousemen, mechanics and material men and other similar
Liens, in respect of liabilities which are not yet due or which are
being contested in good faith, Liens for taxes not yet due and
payable, and Liens for taxes due and payable, the validity or amount
of which is currently being contested in good faith by appropriate
proceedings and as to which foreclosure and other enforcement
proceedings shall not have been commenced (unless fully bonded or
otherwise effectively stayed);
(b) purchase money Liens granted to the vendor or Person
financing the acquisition of property, plant or equipment if (i)
limited to the specific assets acquired and, in the case of tangible
assets, other property which is an improvement to or is acquired for
specific use in connection with such acquired property or which is
real property being improved by such acquired property; (ii) the debt
secured by the Lien is the unpaid balance of the
- 40 -
acquisition cost of the specific assets on which the Lien is granted;
and (iii) such transaction does not otherwise violate this Agreement;
(c) Liens upon real and/or personal property, which property
was acquired after the date of this Agreement (by purchase,
construction or otherwise) by the Borrower or any of its Material
Subsidiaries, each of which Liens existed on such property before the
time of its acquisition and was not created in anticipation thereof;
provided, however, that no such Lien shall extend to or cover any
property of the Borrower or such Material Subsidiary other than the
respective property so acquired and improvements thereon;
(d) Liens arising out of attachments, judgments or awards as
to which an appeal or other appropriate proceedings for contest or
review are promptly commenced (and as to which foreclosure and other
enforcement proceedings (i) shall not have been commenced (unless
fully bonded or otherwise effectively stayed) or (ii) in any event
shall be promptly fully bonded or otherwise effectively stayed);
(e) Liens created under any Fundamental Document;
(f) Existing Liens listed on Schedule 6.5 and any extensions
or renewals thereof;
(g) INTENTIONALLY OMITTED;
(h) Liens consisting of cash and/or cash equivalents
collateral securing the RAC Loan Notes or guarantees thereof provided
that the amount of such cash collateral shall not exceed the amount of
unpaid principal and accrued interest on the RAC Loan Notes at any
time; and
(i) other Liens securing obligations having an aggregate
principal amount not to exceed 15% of Consolidated Net Worth.
SECTION 6.6. Sale and Leaseback.
Enter into any arrangement with any Person or Persons,
whereby in contemporaneous transactions the Borrower or any of its Subsidiaries
sells essentially all of its right, title and interest in a material asset and
the Borrower or any of its Subsidiaries acquires or leases back the right to
use such property except that the Borrower and its Subsidiaries may enter into
sale-leaseback transactions relating to assets not in excess of $200,000,000 in
the aggregate on a cumulative basis.
SECTION 6.7. Leverage.
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Permit the Debt to Capitalization Ratio on the last day of
any fiscal quarter to be more than 0.5 to 1.0.
SECTION 6.8. Interest Coverage Ratio.
Permit the Interest Coverage Ratio for any Rolling Period to
be less than 3.0 to 1.0.
SECTION 6.9. Accounting Practices.
Establish a fiscal year ending on other than December 31, or
modify or change accounting treatments or reporting practices except as
otherwise required or permitted by GAAP.
7. EVENTS OF DEFAULT
In the case of the happening and during the continuance of
any of the following events (herein called "Events of Default"):
(a) any representation or warranty made by the Borrower in
this Agreement or any other Fundamental Document or in connection with
this Agreement or with the execution and delivery of the Term Notes or
the Borrowings hereunder, or any statement or representation made in
any report, financial statement, certificate or other document
furnished by or on behalf of the Borrower or any of its Subsidiaries
to the Administrative Agent or any Lender under or in connection with
this Agreement, shall prove to have been false or misleading in any
material respect when made or delivered;
(b) default shall be made in the payment of any principal of
or interest on the Term Loans or of any fees or other amounts payable
by the Borrower hereunder, when and as the same shall become due and
payable, whether at the due date thereof or at a date fixed for
prepayment thereof or by acceleration thereof or otherwise, and in the
case of payments of interest, such default shall continue unremedied
for five days, and in the case of payments other than of any principal
amount of or interest on the Term Loans, such default shall continue
unremedied for five days after receipt by the Borrower of an invoice
therefor;
(c) default shall be made in the due observance or
performance of any covenant, condition or agreement contained in
Section 5.1(e) (with respect to notice of Default or Events of
Default), 5.8 or Article 6 of this Agreement;
(d) default shall be made by the Borrower in the due
observance or performance of any other covenant, condition or
agreement to be observed or performed pursuant to the
- 42 -
terms of this Agreement, or any other Fundamental Document and such
default shall continue unremedied for thirty (30) days after the
Borrower obtains knowledge of such occurrence;
(e) (i) default in payment shall be made with respect to any
Indebtedness of the Borrower or any of its Subsidiaries where the
amount or amounts of such Indebtedness exceeds $50,000,000 in the
aggregate; or (ii) default in payment or performance shall be made
with respect to any Indebtedness of the Borrower or any of its
Subsidiaries where the amount or amounts of such Indebtedness exceeds
$50,000,000 in the aggregate, if the effect of such default is to
result in the acceleration of the maturity of such Indebtedness; or
(iii) any other circumstance shall arise (other than the mere passage
of time) by reason of which the Borrower or any Subsidiary of the
Borrower is required to redeem or repurchase, or offer to holders the
opportunity to have redeemed or repurchased, any such Indebtedness
where the amount or amounts of such Indebtedness exceeds $50,000,000
in the aggregate; provided that clause (iii) shall not apply to
secured Indebtedness that becomes due as a result of a voluntary sale
of the property or assets securing such Indebtedness and provided,
further clauses (ii) and (iii) shall not apply to any Indebtedness of
any Subsidiary issued and outstanding prior to the date such
Subsidiary became a Subsidiary of the Borrower (other than
Indebtedness issued in connection with, or in anticipation of, such
Subsidiary becoming a Subsidiary of the Borrower) if such default or
circumstance arises solely as a result of a "change of control"
provision applicable to such Indebtedness which becomes operative as
a result of the acquisition of such Subsidiary by the Borrower or any
of its Subsidiaries;
(f) the Borrower or any of its Material Subsidiaries shall
generally not pay its debts as they become due or shall admit in
writing its inability to pay its debts, or shall make a general
assignment for the benefit of creditors; or the Borrower or any of its
Material Subsidiaries shall commence any case, proceeding or other
action seeking to have an order for relief entered on its behalf as
debtor or to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, liquidation, dissolution or
composition of it or its debts under any law relating to bankruptcy,
insolvency, reorganization or relief of debtors or seeking appointment
of a receiver, trustee, custodian or other similar official for it or
for all or any substantial part of its property or shall file an
answer or other pleading in any such case, proceeding or other action
admitting the material allegations of any petition, complaint or
similar pleading filed against it or consenting to the relief sought
therein;
- 43 -
or the Borrower or any Material Subsidiary thereof shall take any
action to authorize any of the foregoing;
(g) any involuntary case, proceeding or other action against
the Borrower or any of its Material Subsidiaries shall be commenced
seeking to have an order for relief entered against it as debtor or to
adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, liquidation, dissolution or composition of it
or its debts under any law relating to bankruptcy, insolvency,
reorganization or relief of debtors, or seeking appointment of a
receiver, trustee, custodian or other similar official for it or for
all or any substantial part of its property, and such case, proceeding
or other action (i) results in the entry of any order for relief
against it or (ii) shall remain undismissed for a period of sixty (60)
days;
(h) the occurrence of a Change in Control;
(i) final judgment(s) for the payment of money in excess of
$50,000,000 shall be rendered against the Borrower or any of its
Subsidiaries which within thirty (30) days from the entry of such
judgment shall not have been discharged or stayed pending appeal or
which shall not have been discharged within thirty (30) days from the
entry of a final order of affirmance on appeal; or
(j) a Reportable Event relating to a failure to meet minimum
funding standards or an Inability to pay benefits when due shall have
occurred with respect to any Plan under the control of the Borrower or
any of its Subsidiaries and shall not have been remedied within 45
days after the occurrence of such Reportable Event, if the occurrence
thereof could reasonably be expected to have a Material Adverse
Effect;
then, in every such event and at any time thereafter during the continuance of
such event, the Administrative Agent may or shall, if directed by the Required
Lenders, declare the principal of and the interest on the Term Loans and the
Term Notes and all other amounts payable hereunder or thereunder to be
forthwith due and payable, whereupon the same shall become and be forthwith due
and payable, without presentment, demand, protest, notice of acceleration,
notice of intent to accelerate or other notice of any kind, all of which are
hereby expressly waived, anything in this Agreement or in the Term Notes to the
contrary notwithstanding. If an Event of Default specified in paragraph (f) or
(g) above shall have occurred, the principal of and interest on the Term Loans
and the Term Notes and all other amounts payable hereunder or thereunder shall
thereupon and concurrently become due and payable without presentment, demand,
protest, notice of acceleration, notice of intent to accelerate or other notice
of any kind, all of which are hereby expressly
- 44 -
waived, anything in this Agreement or the Term Notes to the contrary
notwithstanding.
8. THE ADMINISTRATIVE AGENT
SECTION 8.1. Administration by Administrative Agent.
The general administration of the Fundamental Documents and
any other documents contemplated by this Agreement shall be by the
Administrative Agent or its designees. Each of the Lenders hereby irrevocably
authorizes the Administrative Agent, at its discretion, to take or refrain from
taking such actions as agent on its behalf and to exercise or refrain from
exercising such powers under the Fundamental Documents, the Term Notes and any
other documents contemplated by this Agreement as are delegated by the terms
hereof or thereof, as appropriate, together with all powers reasonably
incidental thereto. The Administrative Agent shall have no duties or
responsibilities except as set forth in the Fundamental Documents. Any Lender
which is a Syndication Agent, Co-Documentation Agent, Managing Agent or
Co-Agent (as indicated on the signature pages hereto) for the credit facility
hereunder shall not have any duties or responsibilities except as a Lender
hereunder.
SECTION 8.2. Advances and Payments.
(a) On the date of the making of the Term Loans, the
Administrative Agent shall be authorized (but not obligated) to advance, for
the account of each of the Lenders, the amount of the Term Loan to be made by
it in accordance with this Agreement. Each of the Lenders hereby authorizes and
requests the Administrative Agent to advance for its account, pursuant to the
terms hereof, the amount of the Term Loan to be made by it, unless with respect
to any Lender, such Lender has theretofore specifically notified the
Administrative Agent that such Lender does not intend to fund that particular
Term Loan. Each of the Lenders agrees forthwith to reimburse the Administrative
Agent in immediately available funds for the amount so advanced on its behalf
by the Administrative Agent pursuant to the immediately preceding sentence. If
any such reimbursement is not made in immediately available funds on the same
day on which the Administrative Agent shall have made any such amount available
on behalf of any Lender in accordance with this Section 8.2, such Lender shall
pay interest to the Administrative Agent at a rate per annum equal to the
Administrative Agent's cost of obtaining overnight funds in the New York
Federal Funds Market. Notwithstanding the preceding sentence, if such
reimbursement is not made by the second Business Day following the day on which
the Administrative Agent shall have made any such amount available on behalf of
any Lender or such Lender has indicated that it does not intend to reimburse
the Administrative Agent, the Borrower shall immediately pay such unreimbursed
advance amount (plus any accrued, but unpaid interest at the rate applicable to
ABR Term Loans) to the Administrative Agent.
- 45 -
(b) Any amounts received by the Administrative Agent in
connection with this Agreement or the Term Notes the application of which is
not otherwise provided for shall be applied, in accordance with each of the
Lenders' pro rata interest therein (and subject to Section 9.3(k) with respect
to any Lender which meets its obligations hereunder by or through an SPC),
first, to pay accrued but unpaid interest on the Term Loans, second, to pay the
principal balance outstanding on the Term Loans and third, to pay other amounts
payable to the Administrative Agent and/or the Lenders. All amounts to be paid
to any of the Lenders by the Administrative Agent shall be credited to the
Lenders, after collection by the Administrative Agent, in immediately available
funds either by wire transfer or deposit in such Lender's correspondent account
with the Administrative Agent, or as such Lender and the Administrative Agent
shall from time to time agree.
SECTION 8.3. Sharing of Setoffs and Cash Collateral.
Each of the Lenders agrees that if it shall, through the
operation of Section 2.19 hereof or the exercise of a right of banker's lien,
setoff or counterclaim against the Borrower, including, but not limited to, a
secured claim under Section 506 of Title 11 of the United States Code or other
security or interest arising from, or in lieu of, such secured claim and
received by such Lender under any applicable bankruptcy, insolvency or other
similar law, or otherwise, obtain payment in respect of its Term Loans as a
result of which the unpaid portion of its Term Loans is proportionately less
than the unpaid portion of any of the other Lenders (a) it shall promptly
purchase at par (and shall be deemed to have thereupon purchased) from such
other Lenders a participation in the Term Loans of such other Lenders, so that
the aggregate unpaid principal amount of each of the Lenders' Term Loans and
its participation in Term Loans of the other Lenders shall be in the same
proportion to the aggregate unpaid principal amount of all Term Loans then
outstanding as the principal amount of its Term Loans prior to the obtaining of
such payment was to the principal amount of all Term Loans outstanding prior to
the obtaining of such payment and (b) such other adjustments shall be made from
time to time as shall be equitable to ensure that the Lenders share such
payment pro rata.
SECTION 8.4. Notice to the Lenders.
Upon receipt by the Administrative Agent from the Borrower of
any communication calling for an action on the part of the Lenders, or upon
notice to the Administrative Agent of any Event of Default, the Administrative
Agent will in turn immediately inform the other Lenders in writing (which shall
include telegraphic communications) of the nature of such communication or of
the Event of Default, as the case may be.
SECTION 8.5. Liability of Administrative Agent.
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(a) The Administrative Agent, when acting on behalf of the
Lenders may execute any of its duties under this Agreement by or through its
officers, agents, or employees and neither the Administrative Agent nor its
directors, officers, agents, employees or affiliates shall be liable to the
Lenders or any of them for any action taken or omitted to be taken in good
faith, or be responsible to the Lenders or to any of them for the consequences
of any oversight or error of judgment, or for any loss, unless the same shall
happen through its gross negligence or willful misconduct. The Administrative
Agent and its directors, officers, agents, employees and affiliates shall in no
event be liable to the Lenders or to any of them for any action taken or
omitted to be taken by it pursuant to instructions received by it from the
Required Lenders or in reliance upon the advice of counsel selected by it.
Without limiting the foregoing, neither the Administrative Agent nor any of its
directors, officers, employees, agents or affiliates shall be responsible to
any of the Lenders for the due execution, validity, genuineness, effectiveness,
sufficiency, or enforceability of, or for any statement, warranty, or
representation in, or for the perfection of any security interest contemplated
by, this Agreement or any related agreement, document or order, or for the
designation or failure to designate this transaction as a "Highly Leveraged
Transaction" for regulatory purposes, or shall be required to ascertain or to
make any inquiry concerning the performance or observance by the Borrower of
any of the terms, conditions, covenants, or agreements of this Agreement or any
related agreement or document.
(b) Neither the Administrative Agent nor any of its
directors, officers, employees, agents or affiliates shall have any
responsibility to the Borrower on account of the failure or delay in
performance or breach by any of the Lenders or the Borrower of any of their
respective obligations under this Agreement or the Term Notes or any related
agreement or document or in connection herewith or therewith.
(c) The Administrative Agent in such capacity hereunder shall
be entitled to rely on any communication, instrument, or document reasonably
believed by it to be genuine or correct and to have been signed or sent by a
Person or Persons believed by it to be the proper Person or Persons, and it
shall be entitled to rely on advice of legal counsel, independent public
accountants, and other professional advisers and experts selected by it.
SECTION 8.6. Reimbursement and Indemnification.
Each of the Lenders severally and not jointly agrees (i) to
reimburse the Administrative Agent, in the amount of its proportionate share,
for any expenses and fees incurred for the benefit of the Lenders under the
Fundamental Documents, including, without limitation, counsel fees and
compensation of
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agents and employees paid for services rendered on behalf of the Lenders, and
any other expense incurred in connection with the administration or enforcement
thereof not reimbursed by the Borrower or one of its Subsidiaries, and (ii) to
indemnify and hold harmless the Administrative Agent and any of its directors,
officers, employees, or agents, on demand, in the amount of its proportionate
share, from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses, or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by, or asserted
against it or any of them in any way relating to or arising out of the
Fundamental Documents or any action taken or omitted by it or any of them under
the Fundamental Documents to the extent not reimbursed by the Borrower or one
of its Subsidiaries (except such as shall result from the gross negligence or
willful misconduct of the Person seeking indemnification).
SECTION 8.7. Rights of Administrative Agent.
It is understood and agreed that the Administrative Agent
shall have the same rights and powers hereunder (including the right to give
such instructions) as the other Lenders and may exercise such rights and
powers, as well as its rights and powers under other agreements and instruments
to which it is or may be party, and engage in other transactions with the
Borrower as though it were not the Administrative Agent on behalf of the
Lenders under this Agreement.
SECTION 8.8. Independent Investigation by Lenders.
Each of the Lenders acknowledges that it has decided to enter
into this Agreement and to make the Term Loans hereunder based on its own
analysis of the transactions contemplated hereby and of the creditworthiness of
the Borrower and agrees that the Administrative Agent shall not bear
responsibility therefor.
SECTION 8.9. Notice of Transfer.
The Administrative Agent may deem and treat any Lender that
is a party to this Agreement as the owner of such Lender's respective portions
of the Term Loans for all purposes, unless and until a written notice of the
assignment or transfer thereof executed by any such Lender shall have been
received by the Administrative Agent and become effective pursuant to Section
9.3.
SECTION 8.10. Successor Administrative Agent.
The Administrative Agent may resign at any time by giving
written notice thereof to the Lenders and the Borrower. Upon any such
resignation, the Required Lenders shall have the right to appoint a successor
Administrative Agent from among the Lenders. If no successor Administrative
Agent shall have been so appointed by the Required Lenders and shall have
accepted such
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appointment, within 30 days after the retiring Administrative Agent's giving of
notice of resignation, the retiring Administrative Agent may, on behalf of the
Lenders, appoint a successor Administrative Agent, which with the consent of
the Borrower, which will not be unreasonably withheld, shall be a commercial
bank organized or licensed under the laws of the United States of America or of
any State thereof and having a combined capital and surplus of at least
$500,000,000. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations under
this Agreement. After any retiring Administrative Agent's resignation hereunder
as Administrative Agent, the provisions of this Article 8 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement.
9. MISCELLANEOUS
SECTION 9.1. Notices.
Notices and other communications provided for herein shall be
in writing and shall be delivered or mailed (or in the case of telegraphic
communication, if by telegram, delivered to the telegraph company and, if by
telex, telecopy, graphic scanning or other telegraphic communications equipment
of the sending party hereto, delivered by such equipment) addressed, if to the
Administrative Agent or Chase, to it at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000-0000 Attn: Xxxxxxxxx Xxxxxx, or if to the Borrower, to it at 0 Xxxx 00xx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx Xxxxxxx, Chief Financial
Officer and Xxxxx X. Xxxxxxx, Vice Chairman and General Counsel, with a copy to
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000,
Attn: Xxxxx Xxxxxxx, or if to a Lender, to it at its address notified to the
Administrative Agent (or set forth in its Assignment and Acceptance or other
agreement pursuant to which it became a Lender hereunder), or such other
address as such party may from time to time designate by giving written notice
to the other parties hereunder. All notices and other communications given to
any party hereto in accordance with the provisions of this Agreement shall be
deemed to have been given on the fifth Business Day after the date when sent by
registered or certified mail, postage prepaid, return receipt requested, if by
mail, or when delivered to the telegraph company, charges prepaid, if by
telegram, or when receipt is acknowledged, if by any telecopier or telegraphic
communications equipment of the sender, in each case addressed to such party as
provided in this Section 9.1 or in accordance with the latest unrevoked written
direction from such party.
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SECTION 9.2. Survival of Agreement, Representations
and Warranties, etc.
All warranties, representations and covenants made by each of
the Borrower in the Fundamental Documents or in any certificate or other
instrument delivered by it or on its behalf in connection with this Agreement
shall be considered to have been relied upon by the Administrative Agent and
the Lenders and shall survive the making of the Term Loans herein contemplated
and the issuance and delivery to the Administrative Agent of the Term Notes
regardless of any investigation made by the Administrative Agent or the Lenders
or on their behalf and shall continue in full force and effect so long as any
amount due or to become due hereunder is outstanding and unpaid. All statements
in any such certificate or other instrument shall constitute representations
and warranties by the Borrower hereunder.
SECTION 9.3. Successors and Assigns; Syndications;
Term Loan Sales; Participations.
(a) Whenever in this Agreement any of the parties hereto is
referred to, such reference shall be deemed to include the successors and
assigns of such party (provided, however, that the Borrower may not assign its
rights hereunder without the prior written consent of all the Lenders), and all
covenants, promises and agreements by, or on behalf of, the Borrower which are
contained in this Agreement shall inure to the benefit of the successors and
assigns of the Lenders.
(b) Each of the Lenders may (but only with the prior written
consent of the Administrative Agent and the Borrower, which consents shall not
be unreasonably withheld or delayed) assign to one or more banks or other
entities all or a portion of its interests, rights and obligations under this
Agreement (including, without limitation, all or a portion of the Term Loans at
the time owing to it and the Term Notes held by it); provided, however, that
(1) each assignment shall be of a constant, and not a varying, percentage of
the assigning Lender's rights and obligations under this Agreement, (2) the
amount of the Term Loans of the assigning Lender subject to each such
assignment (determined as of the date the Assignment and Acceptance with
respect to such assignment is delivered to the Lender) shall be in a minimum
principal amount of $10,000,000 (or, if less, the outstanding principal amount
of the assigning Lender's Term Loans), unless otherwise agreed by the Borrower
and the Administrative Agent and (3) the parties to each such assignment shall
execute and deliver to the Administrative Agent, for its acceptance and
recording in the Register (as defined below), an Assignment and Acceptance,
together with any Term Note subject to such assignment (if required hereunder)
and a processing and recordation fee of $3,500. Upon such execution, delivery,
acceptance and recording, and from and after the effective date specified in
each Assignment and Acceptance, which effective date shall be not earlier than
five Business Days after
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the date of acceptance and recording by the Administrative Agent, (x) the
assignee thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender
hereunder and (y) the assigning Lender thereunder shall, to the extent provided
in such Assignment and Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all or the
remaining portion of the assigning Lender's rights and obligations under this
Agreement, such assigning Lender shall cease to be a party hereto).
(c) Notwithstanding the other provisions of this Section 9.3,
each Lender may at any time make an assignment of all or any part of its
interests, rights and obligations under this Agreement to (i) any affiliate of
such Lender or (ii) any other Lender hereunder.
(d) By executing and delivering an Assignment and Acceptance,
the assigning Lender thereunder and the assignee thereunder confirm to and
agree with each other and the other parties hereto as follows: (i) other than
the representation and warranty that it is the legal and beneficial owner of
the interest being assigned thereby free and clear of any adverse claim, the
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in, or in connection with, this Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Fundamental
Documents or any other instrument or document furnished pursuant hereto or
thereto; (ii) such Lender assignor makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower or CFHC or the performance or observance by the Borrower or CFHC of
any of its obligations under the Fundamental Documents; (iii) such assignee
confirms that it has received a copy of this Agreement, together with copies of
the most recent financial statements delivered pursuant to Sections 5.1(a) and
5.1(b) (or if none of such financial statements shall have then been delivered,
then copies of the financial statements referred to in Section 3.4 hereof) and
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Assignment and Acceptance;
(iv) such assignee will, independently and without reliance upon the assigning
Lender, the Administrative Agent or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement; (v) such assignee appoints and authorizes the Administrative Agent
to take such action as agent on its behalf and to exercise such powers under
the Fundamental Documents as are delegated to the Administrative Agent by the
terms thereof, together with such powers as are reasonably incidental thereto;
and (vi) such assignee agrees that it will be bound by the provisions of this
Agreement and will perform in accordance with its terms all of the obligations
which
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by the terms of this Agreement are required to be performed by it as a
Lender.
(e) The Administrative Agent, on behalf of the Borrower,
shall maintain at its address at which notices are to be given to it pursuant
to Section 9.1, a copy of each Assignment and Acceptance delivered to it and a
register for the recordation of the names and addresses of the Lenders and the
principal amount of the Term Loans owing to each Lender from time to time (the
"Register"). The entries in the Register shall be conclusive, in the absence of
manifest error, and the Borrower, the Administrative Agent and the Lenders may
(and, in the case of any Term Loan or other obligation hereunder not evidenced
by a Term Note, shall) treat each Person whose name is recorded in the Register
as the owner of a Term Loan or other obligation hereunder as the owner thereof
for all purposes of this Agreement and the other Fundamental Documents,
notwithstanding any notice to the contrary. Any assignment of any Term Loan or
other obligation hereunder not evidenced by a Term Note shall be effective only
upon appropriate entries with respect thereto being made in the Register. The
Register shall be available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(f) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and an assignee, any Term Notes subject to such
assignment (if required hereunder) and the processing and recordation fee, the
Administrative Agent (subject to the right, if any, of the Borrower to require
its consent thereto) shall, if such Assignment and Acceptance has been
completed and is substantially in the form of Exhibit C hereto, (i) accept such
Assignment and Acceptance, (ii) record the information contained therein in the
Register and (iii) give prompt written notice thereof to the Borrower. If a
portion of the Term Loans owing to any Lender has been assigned by an assigning
Lender, then such Lender shall deliver its Term Note, if any, at the same time
it delivers the applicable Assignment and Acceptance to the Administrative
Agent. Within five Business Days after receipt of the notice (or such shorter
period as is agreed to by the Borrower), the Borrower, at its own expense,
shall execute and deliver to the applicable Lenders at their request, a new
Term Note to the order of such assignee in an amount equal to the Term Loans
assigned to it pursuant to such Assignment and Acceptance, and a new Term Note
to the order of the assigning Lender in an amount equal to the Term Loans
retained by it hereunder. Any new Term Notes shall be in an aggregate principal
amount equal to the aggregate principal amount of the Term Loans of the
respective assigning Lenders. All new Term Notes shall be dated the date hereof
and shall otherwise be in substantially the forms of Exhibit A hereto.
(g) Each of the Lenders may without the consent of the
Borrower or the Administrative Agent sell participations to one or more banks
or other entities in all or a portion of its rights
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and obligations under this Agreement (including, without limitation, all or a
portion of the Term Loans owing to it and the Term Note or Term Notes held by
it); provided, however, that (i) any such Lender's obligations under this
Agreement shall remain unchanged, (ii) such participant shall not be granted
any voting rights under this Agreement, except with respect to matters
requiring the consent of each of the Lenders hereunder, (iii) any such Lender
shall remain solely responsible to the other parties hereto for the performance
of such obligations, (iv) the participating banks or other entities shall be
entitled to the cost protection provisions contained in Sections 2.14, 2.15,
2.17 and 2.21(e) hereof but a participant shall not be entitled to receive
pursuant to such provisions an amount larger than its share of the amount to
which the Lender granting such participation would have been entitled to
receive, and (v) the Borrower, the Administrative Agent and the other Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement.
(h) The Lenders may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
9.3, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrower furnished to the
Administrative Agent by or on behalf of the Borrower; provided that prior to
any such disclosure, each such assignee or participant or proposed assignee or
participant shall agree, by executing a confidentiality letter in form and
substance equivalent to the confidentiality provisions of Section 9.15 to
preserve the confidentiality of any confidential information relating to the
Borrower received from such Lender.
(i) Each Lender hereby represents that it is a commercial
lender or financial institution which makes loans in the ordinary course of its
business and that it will make the Term Loans hereunder for its own account in
the ordinary course of such business; provided, however, that, subject to
preceding clauses (a) through (h), the disposition of the Term Notes or other
evidence of Indebtedness held by that Lender shall at all times be within its
exclusive control.
(j) The Borrower consents that any Lender may at any time and
from time to time pledge, or otherwise grant a security interest in, any Term
Loan or any Term Note evidencing such Term Loan (or any part thereof),
including any such pledge or grant to any Federal Reserve Bank, and this
Section shall not apply to any such pledge or grant; provided that no such
pledge or grant shall release a Lender from any of its obligations hereunder or
substitute any such assignee for such Lender as a party hereto.
(k) Notwithstanding anything to the contrary contained
herein, any Lender (a "Granting Lender") may grant to a special purpose funding
vehicle (an "SPC") of such Granting Lender, identified as such in writing from
time to time by the Granting
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Lender to the Administrative Agent and the Borrower, the option to provide to
the Borrower all or any part of any Term Loan that such Granting Lender would
otherwise be obligated to make to the Borrower pursuant to Section 2.1 or 2.6,
provided that (i) nothing herein shall constitute a commitment to make any Term
Loan by any SPC and (ii) if an SPC elects not to exercise such option or
otherwise fails to provide all or any part of such Term Loan or fund any other
obligation required to be funded by it hereunder, the Granting Lender shall be
obligated to make such Term Loan or fund such obligation pursuant to the terms
hereof. The making of a Term Loan by an SPC hereunder shall satisfy the
obligation of the Granting Lenders to make Term Loans to the same extent, and
as if, such Loan were made by the Granting Lender. Each party hereto hereby
agrees that no SPC shall be liable for any payment under this Agreement for
which a Lender would otherwise be liable, for so long as, and to the extent,
the related Granting Lender makes such payment. In furtherance of the
foregoing, each party hereto hereby agrees that, prior to the date that is one
year and one day after the payment in full of all outstanding senior
indebtedness of any SPC, it will not institute against or join any other person
in instituting against, such SPC any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings or similar proceedings under the laws of
the United States or any State thereof. In addition, notwithstanding anything
to the contrary contained in this Section 9.3 any SPC may (i) with notice to,
but without the prior written consent of, the Borrower or the Administrative
Agent and without paying any processing fee therefor, assign as collateral
security all or a portion of its interests in any Term Loan to its Granting
Lender or to any financial institutions providing liquidity and/or credit
facilities to or for the account of such SPC to fund the Term Loans made by SPC
or to support the securities (if any) issued by such SPC to fund such Term
Loans and (ii) disclose on a confidential basis any non-public information
relating to its Term Loans to any rating agency, commercial paper dealer or
provider of a surety, guarantee or credit or liquidity enhancement to such SPC.
Notwithstanding any other provision of this Agreement, the Borrower agrees that
it will not use the proceeds of any Term Loan made by a Lender which is funded
through an SPC to be used to purchase or carry Margin Stock if such Lender (i)
notifies the Borrower that its Term Loan will be funded through an SPC and (ii)
requests the Borrower prior to the Closing Date not to use the proceeds of its
Term Loan for such purpose.
SECTION 9.4. Expenses; Documentary Taxes.
Whether or not the transactions hereby contemplated shall be
consummated, the Borrower agrees to pay all reasonable out-of-pocket expenses
incurred by the Administrative Agent in connection with the syndication,
preparation, execution, delivery and administration of this Agreement, the Term
Notes and the making of the Term Loans, including but not limited to any
internally allocated audit costs, the reasonable fees and
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disbursements of Xxxxxxx Xxxxxxx & Xxxxxxxx, counsel to the Administrative
Agent, as well as all reasonable out-of-pocket expenses incurred by the Lenders
in connection with any restructuring or workout of this Agreement or the Term
Notes or in connection with the enforcement or protection of the rights of the
Lenders in connection with this Agreement or the Term Notes or any other
Fundamental Document, and with respect to any action which may be instituted by
any Person against any Lender in respect of the foregoing, or as a result of
any transaction, action or nonaction arising from the foregoing, including but
not limited to the fees and disbursements of any counsel for the Lenders. Such
payments shall be made on the date of execution of this Agreement and
thereafter on demand. The Borrower agrees that it shall indemnify the
Administrative Agent and the Lenders from, and hold them harmless against, any
documentary taxes, assessments or charges made by any Governmental Authority by
reason of the execution and delivery of this Agreement or the Term Notes or any
other Fundamental Document. The obligations of the Borrower under this Section
shall survive the termination of this Agreement and/or the payment of the Term
Loans.
SECTION 9.5. Indemnity.
Further, by the execution hereof, the Borrower agrees to
indemnify and hold harmless the Administrative Agent and the Lenders and their
respective directors, officers, employees and agents (each, an "Indemnified
Party") from and against any and all expenses (including reasonable fees and
disbursements of counsel), losses, claims, damages and liabilities arising out
of any claim, litigation, investigation or proceeding (regardless of whether
any such Indemnified Party is a party thereto) in any way relating to the
transactions contemplated hereby, but excluding therefrom all expenses, losses,
claims, damages, and liabilities arising out of or resulting from the gross
negligence or willful misconduct of the Indemnified Party seeking
indemnification, provided, however, that the Borrower shall not be liable for
the fees and expenses of more than one separate firm for all such Indemnified
Parties in connection with any one such action or any separate but
substantially similar or related actions in the same jurisdiction, nor shall
the Borrower be liable for any settlement of any proceeding effected without
the Borrower's written consent, and provided further, however, that this
Section 9.5 shall not be construed to expand the scope of the Borrower's
reimbursement obligations specified in Section 9.4. The obligations of the
Borrower under this Section 9.5 shall survive the termination of this Agreement
and/or payment of the Term Loans.
SECTION 9.6. CHOICE OF LAW.
THIS AGREEMENT AND THE TERM NOTES HAVE BEEN EXECUTED AND
DELIVERED IN THE STATE OF NEW YORK AND SHALL IN ALL RESPECTS BE CONSTRUED IN
ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF SUCH STATE APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED
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WHOLLY WITHIN SUCH STATE AND, IN THE CASE OF PROVISIONS RELATING TO INTEREST
RATES, ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.
SECTION 9.7. No Waiver.
No failure on the part of the Administrative Agent or any
Lender to exercise, and no delay in exercising, any right, power or remedy
hereunder or under the Term Notes shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right, power or remedy preclude any
other or further exercise thereof or the exercise of any other right, power or
remedy. All remedies hereunder are cumulative and are not exclusive of any
other remedies provided by law.
SECTION 9.8. Extension of Maturity.
Except as otherwise specifically provided in Article 8
hereof, should any payment of principal of or interest on the Term Notes or any
other amount due hereunder become due and payable on a day other than a
Business Day, the maturity thereof shall be extended to the next succeeding
Business Day and, in the case of principal, interest shall be payable thereon
at the rate herein specified during such extension.
SECTION 9.9. Amendments, etc.
No modification, amendment or waiver of any provision of this
Agreement, and no consent to any departure by the Borrower herefrom or
therefrom, shall in any event be effective unless the same shall be in writing
and signed or consented to in writing by the Required Lenders, and then such
waiver or consent shall be effective only in the specific instance and for the
purpose for which given; provided, however, that no such modification or
amendment shall without the written consent of each Lender affected thereby (x)
alter the stated maturity or principal amount of any installment of any Term
Loan, or decrease the rate of interest payable thereon or decrease any fees
payable hereunder or extend the date on which any interest payment is due, or
(y) waive a default under Section 7(b) hereof with respect to a scheduled
principal installment of any Term Loan; and provided, further that no such
modification or amendment shall without the written consent of all of the
Lenders (i) amend or modify any provision of this Agreement which provides for
the unanimous consent or approval of the Lenders, or (ii) amend this Section
9.9 or the definition of Required Lenders. No such amendment or modification
may adversely affect the rights and obligations of the Administrative Agent
hereunder without its prior written consent. No notice to or demand on the
Borrower shall entitle the Borrower to any other or further notice or demand in
the same, similar or other circumstances. Each holder of a Term Note shall be
bound by any amendment, modification, waiver or consent authorized as provided
herein, whether or not a Term Note shall have been marked to indicate such
amendment,
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modification, waiver or consent and any consent by any holder of a Term Note
shall bind any Person subsequently acquiring a Term Note, whether or not a Term
Note is so marked.
SECTION 9.10. Severability.
Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 9.11. SERVICE OF PROCESS; WAIVER OF JURY TRIAL.
(a) THE BORROWER HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF THE STATE COURTS OF THE STATE OF NEW YORK LOCATED IN NEW YORK
COUNTY AND TO THE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK, FOR THE PURPOSES OF ANY SUIT, ACTION OR OTHER
PROCEEDING ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE SUBJECT MATTER
HEREOF BROUGHT BY THE ADMINISTRATIVE AGENT OR A LENDER. THE BORROWER TO THE
EXTENT PERMITTED BY APPLICABLE LAW (A) HEREBY WAIVES, AND AGREES NOT TO ASSERT,
BY WAY OF MOTION, AS A DEFENSE, OR OTHERWISE, IN ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN SUCH COURTS, ANY CLAIM THAT IT IS NOT SUBJECT PERSONALLY
TO THE JURISDICTION OF THE ABOVE-NAMED COURTS, THAT ITS PROPERTY IS EXEMPT OR
IMMUNE FROM ATTACHMENT OR EXECUTION, THAT THE SUIT, ACTION OR PROCEEDING IS
BROUGHT IN AN INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT, ACTION OR
PROCEEDING IS IMPROPER OR THAT THIS AGREEMENT OR THE SUBJECT MATTER HEREOF MAY
NOT BE ENFORCED IN OR BY SUCH COURT, AND (B) HEREBY WAIVES THE RIGHT TO ASSERT
IN ANY SUCH ACTION, SUIT OR PROCEEDING ANY OFFSETS OR COUNTERCLAIMS EXCEPT
COUNTERCLAIMS THAT ARE COMPULSORY OR OTHERWISE ARISE FROM THE SAME SUBJECT
MATTER. THE BORROWER HEREBY CONSENTS TO SERVICE OF PROCESS BY MAIL AT ITS
ADDRESS TO WHICH NOTICES ARE TO BE GIVEN PURSUANT TO SECTION 9.1 HEREOF. THE
BORROWER AGREES THAT ITS SUBMISSION TO JURISDICTION AND CONSENT TO SERVICE OF
PROCESS BY MAIL IS MADE FOR THE EXPRESS BENEFIT OF THE ADMINISTRATIVE AGENT AND
THE LENDERS. FINAL JUDGMENT AGAINST THE BORROWER IN ANY SUCH ACTION, SUIT OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN ANY OTHER JURISDICTION
(A) BY SUIT, ACTION OR PROCEEDING ON THE JUDGMENT, A CERTIFIED OR TRUE COPY OF
WHICH SHALL BE CONCLUSIVE EVIDENCE OF THE FACT AND THE AMOUNT OF INDEBTEDNESS
OR LIABILITY OF THE SUBMITTING PARTY THEREIN DESCRIBED OR (B) IN ANY OTHER
MANNER PROVIDED BY, OR PURSUANT TO, THE LAWS OF SUCH OTHER JURISDICTION,
PROVIDED, HOWEVER, THAT THE ADMINISTRATIVE AGENT OR A LENDER MAY AT IS OPTION
BRING SUIT, OR INSTITUTE OTHER JUDICIAL PROCEEDINGS AGAINST THE BORROWER OR ANY
OF ITS ASSETS IN ANY XXXXX XX XXXXXXX XXXXX XX XXX XXXXXX XXXXXX OR OF ANY
COUNTRY OR PLACE WHERE THE BORROWER OR SUCH ASSETS MAY BE FOUND.
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(b) TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH
CANNOT BE WAIVED, EACH PARTY HERETO HEREBY WAIVES, AND COVENANTS THAT IT WILL
NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL
BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM, DEMAND, ACTION, OR CAUSE
OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE SUBJECT MATTER
HEREOF, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING OR WHETHER IN
CONTRACT OR TORT OR OTHERWISE. EACH PARTY HERETO ACKNOWLEDGES THAT IT HAS BEEN
INFORMED THAT THE PROVISIONS OF THIS SECTION 9.11(b) CONSTITUTE A MATERIAL
INDUCEMENT UPON WHICH THE OTHER PARTIES HAVE RELIED, ARE RELYING AND WILL RELY
IN ENTERING INTO THIS AGREEMENT. THE PARTIES HERETO MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION 9.11(b) WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF SUCH OTHER PARTY TO THE WAIVER OF ITS RIGHTS TO
TRIAL BY JURY.
SECTION 9.12. Headings.
Section headings used herein are for convenience only and are
not to affect the construction of or be taken into consideration in
interpreting this Agreement.
SECTION 9.13. Execution in Counterparts.
This Agreement may be executed in any number of counterparts, each of
which shall constitute an original, but all of which taken together shall
constitute one and the same instrument.
SECTION 9.14. Entire Agreement.
This Agreement represents the entire agreement of the parties
with regard to the subject matter hereof and the terms of any letters and other
documentation entered into among the Borrower, the Administrative Agent or any
Lender (other than the provisions of the letter agreement dated May 4, 1998,
among the Borrower, Chase and Chase Securities Inc., relating to fees and
expenses and syndication issues) prior to the execution of this Agreement which
relate to Term Loans to be made hereunder shall be replaced by the terms of
this Agreement.
SECTION 9.15. Confidentiality.
Each of the Administrative Agent and the Lenders agrees to
keep confidential all non-public information provided to it by the Borrower and
its Subsidiaries pursuant to this Agreement that is designated by the Borrower
as confidential; provided that nothing herein shall prevent the Administrative
Agent or any Lender from disclosing any such information (a) to the
Administrative Agent, any other Lender or any affiliate of any Lender, (b) to
any participant or assignee (each, a "Transferee") of such Lender or
prospective Transferee which agrees to comply with the provisions of this
Section, (c) any of its employees, directors, agents, attorneys, accountants
and other professional
- 58 -
advisors, (d) upon the request or demand of any governmental or regulatory
authority having jurisdiction over it, (e) in response to any order of any
court or other governmental authority or as may otherwise be required pursuant
to any requirement of Law, (f) if requested or required to do so in connection
with any litigation or similar proceeding, (g) which has been publicly
disclosed other than in breach of this Section 9.15, (h) to the National
Association of Insurance Commissioners or any similar organization or any
nationally recognized rating agency that requires access to information about a
Lender's investment portfolio in connection with ratings issued with respect to
such Lender or (i) in connection with the exercise of any remedy hereunder or
under any other Fundamental Document.
- 59 -
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and the year first above written.
CENDANT CORPORATION
By: /s/ Xxxxx Xxxxxxx
-----------------------------
Title: Senior Executive Vice
President & Chief Financial
Officer
THE CHASE MANHATTAN BANK, as
Administrative Agent and
Lender
By: /s/ Xxxxx X. Ulme
-------------------------
Title: Vice President
BANK OF AMERICA NT&SA, as
Syndication Agent and Lender
By: /s/ Xxxxx X. Xxxxxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Managing Director
THE BANK OF NOVA SCOTIA, as
Co-Documentation Agent and as
Lender
By: /s/ Xxxxxxx Xxxxxxxx
-------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Senior Relationship
Manager
BARCLAYS BANK PLC, as
Co-Documentation Agent and
Lender
By: /s/ Xxxxx X. Xxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxx
Title: Associate Director
- 60 -
CREDIT LYONNAIS NEW YORK BRANCH, as
Co-Documentation Agent and as
Lender
By: /s/ Xxxxxxxx Xxxxx
-------------------------------
Name: Vladimur Xxxxx
Title: First Vice President &
Manager
FIRST UNION NATIONAL BANK, as
Managing Agent and as Lender
By: /s/ Xxxxxxxxxxx X. XxXxxxxxxx
-------------------------------
Name: Xxxxxxxxxxx X. XxXxxxxxxx
Title: Vice President
THE INDUSTRIAL BANK OF JAPAN,
LIMITED, as Managing Agent and
as Lender
By: /s/ Xxxxxxx Xxxxxxx
-------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Vice President
CREDIT SUISSE FIRST BOSTON, as Co-
Agent and as Lender
By: /s/ Xxxx X'Xxxx
-------------------------------
Name: Xxxx X'Xxxx
Title: Vice President
By: /s/ Xxxxx X. Xxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
- 61 -
PARIBAS, as Co-Agent and as Lender
By: /s/ Xxxx Xxxxxxx
-------------------------------
Name: Xxxx Xxxxxxx
Title: Managing Director
By: /s/ Xxxxx X. Sergeant
-------------------------------
Name: Xxxxx X. Sergeant
Title: Associate
THE SUMITOMO BANK, LIMITED, NEW YORK
BRANCH, as Co-Agent and as
Lender
By: /s/ J. Xxxxx Xxxxxxxx
-------------------------------
Name: J. Xxxxx Xxxxxxxx
Title: Senior Vice President
THE BANK OF TOKYO-MITSUBISHI, LTD.,
NEW YORK BRANCH
By: /s/ Xxxxxxx Xxxxxxxx
-------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Attorney-in-fact
COMERICA BANK
By: /s/ Xxxxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: Vice President
FLEET NATIONAL BANK
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxxx Xxxxxxxx Xxxxxx
Title: Vice President
ROYAL BANK OF CANADA
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Senior Manager
- 62 -
THE SANWA BANK LIMITED
By: /s/ Xxxxxxx X. Small
-------------------------------
Name: Xxxxxxx X. Small
Title: Vice President & Area
Manager
WESTDEUTSCHE LANDESBANK
GIROZENTRALE, NEW YORK BRANCH
By: /s/ Xxxx X. Xxxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President
By: /s/ Xxxxxx X. Xxxxx III
-------------------------------
Name: Xxxxxx X. Xxxxx III
Title: Associate
- 63 -
Schedule 2.1
Term Loans
Lender Term Loans
------ ----------
The Chase Manhattan Bank $200,000,000.00
Bank of America NT & SA $175,000,000.00
Bank of Nova Scotia $125,000,000.00
Barclays Bank PLC $125,000,000.00
Credit Lyonnais New York Branch $125,000,000.00
First Union National Bank $100,000,000.00
Industrial Bank of Japan Ltd. $100,000,000.00
Credit Suisse First Boston $50,000,000.00
Paribas $50,000,000.00
Sumitomo Bank, Ltd. $50,000,000.00
Bank of Tokyo-Mitsubishi, Ltd. $25,000,000.00
Comerica Bank $25,000,000.00
Fleet National Bank $25,000,000.00
Royal Bank of Canada $25,000,000.00
Sanwa Bank Ltd. $25,000,000.00
Westdeutsche Landesbank Girozentrale $25,000,000.00
TOTAL $1,250,000,000.00
Schedule 3.9
Litigation
None
Schedule 3.16
Environmental Liabilities
None
Schedule 6.1
Existing Indebtedness
Lease Agreement dated 11/29/91 between Days Inns of America, Inc.
and Xxxx Xxxxxxx Life Insurance Company in the amount of $373,970.
Lease Agreement dated 8/1/93 between Coldwell Banker Corporation and Pitney
Xxxxx in the amount of $22,805.
Lease Agreement dated 6/1/95 between Coldwell Banker Corporation and Xerox
Corporation in the amount of $652,331.
Unsecured borrowings by Coldwell Banker Corporation from Xxxxx Fargo Bank in
principal amount of $27,000,000.
Schedule 6.5
Existing Liens
Liens in connection with leases of office equipment incurred in the ordinary
course of business.
